OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Higher |
| Soybean Futures: | 8 to 10 Higher |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 3 to 4 Higher |
MILK:
The substantial decline in Class III futures Tuesday moved the April contract limit-down. Follow-through weakness continued in overnight trading. The significant weakness in the block cheese price may cause buyers to pull back further as they wait to see whether the sellers remain aggressive. The action on Tuesday is further evidence the upside price potential may be limited. The hope from the government announcement a few weeks ago indicating they would purchase dairy products for food banks has had little impact on the market. Milk production is expected to remain strong, with the USDA estimating output this year reaching 234.7 billion pounds.
CHEESE:
The weakness of the block cheese price on Tuesday quickly turned the market negative. The hope of continued support from the recent price increases was quickly eliminated. Seasonally increasing milk production is moving milk to the cheese vat. Inventory may build more rapidly than usual through the first half of the year.
BUTTER:
The large decline in the butter price may cause buyers to be more aggressive in the spot market as they take advantage of the lower price. However, buyers may wait to see whether sellers need to move more product and will offer lower prices to move supplies.
