Opening Calls:
| Class III Milk Futures: | Steady to 10 Lower |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Steady to 1 Lower |
Outside Market Opening Calls:
| Corn Futures: | 1 to 3 Higher |
| Soybean Futures: | 10 to 14 Higher |
| Soybean Meal Futures: | $3 to $5 Higher |
| Wheat Futures: | 1 to 3 Lower |
Milk:
The December and January Class III prices have come quickly back together after a period of time during which January was running a discount of about $2.00 to the December. December has fallen $2.22 over the past four days. One would think the market would bounce as it would seem it is overdone. However, if cheese prices continue to weaken as they have been over the past two weeks that may not be the case. With prices falling due to a slowing of buyer interest, which indicates slowing demand. There are more discussions over the potential for plant quotas being implemented sooner than they had last year. With further restrictions being put on some states for nonessential businesses and gatherings, overall demand may fall back more than anticipated. Not from the retail sector, but from the food service industry. Even though there has been positive news as far as a COVID vaccine, it will take some time before it will be widely distributed once it is approved and begins manufacturing. It will take time to return to a new normal.
Cheese: A stable block cheese price Tuesday does not indicate a bottom has yet been established. It was likely sellers testing the market to see if buyers might step up if they did not offer lower prices. The result was no bids were even placed. This is a concern and indicates buyers were not interested even at the current price. The depth of price correction is unknown but may be lower than the price decline in August.
Butter:
Price could be moving another leg down as it has fallen below the previous low. Churning is active with plentiful cream supply. Product is being moved quickly to the market rather than holding and speculating on futures price strength. Inventory is currently on track to end the year higher than last year, which is not positive for price potential.
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