OPENING CALLS:
| Class III Milk Futures: | 8 to 12 Higher |
| Class IV Milk Futures: | 8 to 15 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 10 to 13 Higher |
MILK:
Milk futures may show strength Monday as there is renewed optimism over higher cash prices. Underlying cash prices will need to show strength for milk futures to recover from the losses of last week. However, with milk production increasing, it may be difficult to generate aggressive buying interest in the spot markets. The key to higher prices will be maintaining and increasing demand. There is little to slow down milk production. Current milk prices and high calf prices will keep farmers wanting to push milk production. High fuel prices and the potential for them to remain high may impact demand, as there are indications of a slowing of restaurant traffic due to higher fuel and food prices. The talks broke down with Iran over the weekend, which will keep prices higher.
CHEESE:
Cheese output is strong and expected to increase as the spring flush progresses. This may leave buyers less aggressive in the spot market as sellers may continue to move cheese to the spot market rather than build inventory at the plant level.
BUTTER:
Even with increased demand, the butter price has yet to find solid support. Manufacturers are interested in moving supplies to the spot market as quickly as possible and have been willing to sell at lower prices. Until a tightening of supply takes place, this is expected to continue limiting the upside price potential.
