OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 4 to 5 Lower |
| Soybean Futures: | 5 to 7 Lower |
| Soybean Meal Futures: | $0.50 to $1 Higher |
| Wheat Futures: | 11 to 14 Lower |
MILK:
The nearby Class III contracts remain choppy while later contracts continue to make new highs. The optimism over higher prices as the year progresses may be fueled by increased dairy product production and the inability to rebuild inventory. USDA will release the February Dairy Products report on Thursday. Milk production is increasing as the spring flush unfolds. However, no difficulty is expected handling the increased milk supply. The potential for higher milk prices, as indicated by milk futures, will keep milk production strong and cow numbers increasing.
CHEESE:
Cheese prices are maintaining an overall uptrend, with the price increase on Tuesday keeping the trend intact. Cheese output has been increasing, but demand has so far been keeping pace. This resulted in the February total cheese inventory being below that of a year ago. There is no concern of a supply tightness. Buyers are purchasing for immediate demand and to build inventory.
BUTTER:
It is uncertain as to where the level of support for the butter price will be. The weakness on Tuesday was surprising, as butter demand is strong, with support expected to have been reached last week. It certainly is a buyer's market as they can purchase a substantial amount of butter at lower prices. This may limit the upside price potential later this year.
