Opening Calls:
| Class III Milk Futures: | 15 to 20 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
Outside Market Opening Calls:
| Corn Futures: | 1 to 3 Lower |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 5 to 8 Lower |
Milk:
Class III milk futures showed surprising strength. Prices jumped significantly on the open but have lost about half the initial gains to this point. It seems this is tied to the stimulus and the potential that it will contain some money for agriculture in general or possibly more funding for another Food Box program. However, there seems to be no indication of that in the overview of what the bill contains. Nothing has yet been released by USDA, but maybe there might be some provision of something in the relief package. Many of the outside markets are being hit hard due to the new COVID-19 strain found in the U.K. This is having a profound effect on that country and travel to and from there has been curtailed drastically. That has created a panic in the markets for the time being. But the dairy complex seems to be immune to the outside market influence at present.
Cheese:
Cheese futures are bid higher than the close Friday following a similar pattern as Class III futures. It is unclear what has triggered the strength, but markets look to be regaining what was lost on Friday. If the new strain of COVID-19 moves across the world, it should not affect retail demand for dairy as it will remain an important part of the diet. USDA will release the November Cold Storage report Monday, providing a good indication of the level of production and demand for dairy. Inventory should show a decline from October.
Butter:
Although there was a lot of exuberance in Class III and cheese futures overnight, this does not seem to be the case for Class IV and butter. There is a strong potential butter inventories grew in comparison to the previous year in the month of November. Inventory is expected to decline from October, but at a slower pace than usual due to heavy butter production during the month. Price is expected to remain choppy.
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