OPENING CALLS:
| Class III Milk Futures: | 2 to 4 Lower |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | 1 to Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Higher |
| Soybean Futures: | 3 to 5 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 7 to 9 Higher |
MILK:
Tuesday was a dismal day for milk futures. Class IV contracts took the brunt of the weakness due to the large decline in the spot Grade A nonfat dry milk price. Class IV futures had been carrying a substantial discount in deferred contracts in the anticipation that nonfat dry milk would not be able to hold its lofty price. It has not as high prices cure high prices. Butter and cheese seem to have found support, but the support for nonfat dry milk may be substantially lower. Trading activity will be light ahead of spot trading. Traders will wait to see the direction of spot prices before either adding or removing contracts.
CHEESE:
There is little expectation for the current supply and demand situation to change anytime soon. Increased milk supplies moving to cheese vats result in higher cheese output. Increased cheese demand keeps supply from overwhelming the market. However, this keeps cheese prices in a range. Prices are not expected to change much for a while.
BUTTER:
There are always a large number of loads to be sold showing up each day in the spot market. Buying has been impressive as the market has held the gains of recent weeks. However, the volume of butter offered for sale will limit the market's upside price potential.
