OPENING CALLS:
| Class III Milk Futures: | 10 to 25 Lower |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Higher |
| Soybean Futures: | 8 to 11 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 15 to 18 Higher |
MILK:
The minor strength in the block cheese price Thursday did not support Class III futures. Traders anticipate cheese prices to retrace and are not buying into the recent strength. Continued strong milk production will keep a sufficient supply available for bottling and manufacturing. The uncertainty of the outside markets continues to fuel the uncertainty of demand and the potential for milk prices. The overnight Class III futures showed losses of 8-48 cents. It is unusual to see losses in the 30- to 40-cent range in overnight activity. That may be a bit excessive ahead of spot trading, but does paint a bearish picture for Friday.
CHEESE:
Some of the bearishness of overnight trade in Class III futures may be the result of the January Dairy Products report showing strong cheese output during the month compared to a year ago. This output will only increase with increased cow numbers and higher milk production. This is expected to keep cheese inventory above a year ago through the first half of the year.
BUTTER:
The spot butter price increase on Thursday took place on unfilled bids. That would suggest the price may increase further Friday. Buyers may want to increase ownership in preparation for continued strong demand. The significant increase in butter output in January is increasing inventory, but supplies remain significantly lower than a year ago.
