OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 4 to 5 Lower |
| Soybean Futures: | 15 to 30 Lower |
| Soybean Meal Futures: | $5 to $7 Lower |
| Wheat Futures: | 7 to 10 Lower |
MILK:
Milk futures showed an interesting dynamic in overnight trade. The March and April Class III contracts showed weakness, while the September, October, and November contracts showed strength. Generally, trading is confined to the nearby contracts. The strength in later contracts should not be surprising, as there is the possibility of better milk prices by that time. Seasonally, those are the higher prices of the year. That was not the pattern we saw last year, but there is a good chance it will not be repeated this year. Strong milk production will need increased demand, or the supply will limit upside price potential.
CHEESE:
Cheese prices are expected to remain choppy. Cheese output is increasing, and more milk will be moving to manufacturing as milk receipts increase at the plant level. Milk production is not expected to slow down anytime soon. The current spot prices for milk range from $5.00 below to flat class. This may remain that way moving through the spring flush period.
BUTTER:
The sharp downturn in the butter price last week may increase buyer interest. Demand has improved domestically due to lower prices. Buyers will want to take advantage of the lower price to purchase supplies and freeze them for later use. Ice cream production is beginning to increase. This will increase the demand for cream and reduce the amount available for churning. However, that will not cause concern over a shortage.
