OPENING CALLS:
| Class III Milk Futures: | 8 to 14 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Lower |
| Soybean Futures: | 3 to 4 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 3 to 5 Lower |
MILK:
The strength in Class III milk futures continued into overnight trading, with some contracts posting double-digit gains. There has not been a fundamental change, but cheese buyers may be more aggressive as they look ahead and prepare for later demand. Spot prices are low, and it makes sense to increase ownership and purchase ahead for later demand rather than wait and end up paying more later. Milk production is being impacted by increasing temperatures, but output is expected to remain higher than a year ago. The USDA will release the World Agricultural Supply and Demand report Friday at 11 a.m. CDT. The report will include their estimates for milk production, milk prices, and dairy product prices for this year and next year.
CHEESE:
The strength in cheese prices may continue Friday as the increase on Thursday may bring more buyers into the market with the desire to purchase supplies ahead of further price strength. However, buyers may be cautious as milk supplies are plentiful and cheese output strong. This may limit the upside potential.
BUTTER:
The butter price held steady the past three days, but is expected to increase Friday. There is little reason for the price to fall back as buyer interest is expected to increase. Both domestic and international demand is strong and is expected to remain strong. Churning is slowing as higher temperatures impact milk components and reduce the cream supply.
