OPENING CALLS:
| Class III Milk Futures: | 8 to 15 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 6 to 8 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 5 to 7 Higher |
MILK:
Milk futures rebounded Tuesday after spot cheese and dry whey prices increased. Not only did Class III futures benefit from the strength, but it spilled over to Class IV futures as well. Class IV futures are in a better position to see further strength due to a bullish posture for butter and nonfat dry milk. However, the fundamentals indicated continued strong milk production that will maintain a sufficient supply of milk for bottling and manufacturing. Demand is good, but without a significant increase in demand, the upside potential for milk prices might be limited.
CHEESE:
Cheese plants are running on full schedules as the milk supply is heavy. Few plants are reaching out to the spot market for extra milk, which keeps spot milk prices at a discount to class. The increase in the spot cheese prices on Tuesday seems due to low prices rather than a change in fundamentals. It just makes sense for buyers to purchase and build inventory.
BUTTER:
The steady butter price did not provide traders with any sense of direction. The six unfilled bids and six uncovered offers that remained at the close of spot trading also provided no direction. Buyers and sellers were at a standoff waiting to see who would move first. The same may be true today.
