OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 1 Lower |
| Soybean Futures: | 4 to 6 Higher |
| Soybean Meal Futures: | Steady to 1 Higher |
| Wheat Futures: | Mixed |
MILK:
The spread between Class III and Class IV futures continues to widen. Most of the strength in Class IV futures has been the result of nonfat dry milk. The rebound of butter on Monday added further support to the market, even though the nonfat dry milk price remained unchanged. Both cheese and butter production remain strong, resulting in limited upside potential for prices. Milk receipts continue to increase at the plant level in much of the nation as the spring flush continues. Manufacturers are moving supplies to the spot market rather than building inventory. The March Milk Production report will be released Wednesday and is expected to show higher milk production and cow numbers.
CHEESE:
Cheese prices may have difficulty showing much strength over the next few months. Increased milk production will keep cheese production strong and spot milk supplies readily available at a discount to class. Demand may be sufficient to keep cheese inventory from growing, but it may not be sufficient to increase prices.
BUTTER:
The bounce in the spot butter price on Monday did not change the direction of the market. The price remains in a downtrend and is unable to find solid support. Butter inventory is below a year ago, but manufacturers intend to move supplies to the market rather than build inventory.
