Opening Calls:
| Class III Milk Futures: | 10 to 20 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
Outside Market Opening Calls:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | 2 to 4 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 2 to 4 Higher |
Milk:
Class III futures are under substantial pressure with double-digit losses posted overnight. Trading activity was relatively high for the night. Reality may be setting in as traders realize underlying cheese prices really have not moved much over the past month and the vaccine and stimulus possibility may not have much impact on dairy demand directly. The main elements will be for some sort of stimulus check, enhanced unemployment benefits, some funding for small business and some money to aid in the distribution of the vaccine. There does not appear to be anything in reference to a Food Box program. There had been a lot of hopes that the program would be continued next year, but that does not seem to be on the table right now and that might remove some of the emotional support of the market. However, no one knows what will take place next year with the new administration. USDA will release the November Milk Production report Wednesday afternoon. I estimate milk production to be up 2.5% from a year ago and cow number to be up 6,000 head from October.
Cheese:
Trading activity and price movement in spot cheese Wednesday did not provide any indication as to strength or weakness of the market. Traders might have viewed the inability of the market to move higher as a potential that buyers do not want to bid higher. Holiday demand is finished, and buyers do not need to be aggressive as supply is sufficient for demand. Steady to higher prices will be critical for price support Thursday.
Butter:
Price continues to follow the overall pattern that has been prevalent since July. Recently, price has remained in a sideways trading pattern, but the overall pattern remains down. Churning is active due to heavy cream supply. Some would like to reduce output to get more in line with supply and demand, but that has been difficult.
