Opening Calls:
| Class III Milk Futures: | 20 to 50 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 2 to 3 Higher |
Outside Market Opening Calls:
| Corn Futures: | Mixed |
| Soybean Futures: | 1 to 3 Lower |
| Soybean Meal Futures: | $1 to $3 Lower |
| Wheat Futures: | 5 to 10 Lower |
Milk:
Class III milk futures are exhibiting a similar market pattern as Sunday night except buying has been more aggressive this time. Traders are bulled up over the potential of significant demand for dairy products as a result of $13 billion being appropriated for food assistance in the stimulus bill. It is unclear how this will break down and whether there will be another Farmers to Families Food Box program. It certainly was effective in 2020, increasing demand for dairy products and moving prices higher. Traders are looking over their shoulders as to what took place previously and are jumping to get ahead of it this time. If a similar impact will be made in the market, we may see the continuation of large negative PPDs as cheese prices could again run away from butter and powder prices. It is too early to tell what the impact will be. However, this will create volatility and increase price premiums in futures contracts in anticipation of higher demand. There have not been any solicitations put out by USDA for dairy product purchases nor has there even been any mention of it by USDA as of yet and not likely through the end of the year.
Cheese:
It will be up to cheese prices to support the exuberance in milk futures. If cheese remains in the pattern it has already established, the upside to milk futures will be limited. There really has not been any change to current fundamentals as holiday demand has been filled with buyers looking ahead to first quarter demand and rebuilding aging programs.
Butter:
Price is expected to continue to struggle through the end of the year remaining in a sideways range. USDA will release the November Cold Storage report Tuesday, which may keep any price increase short-lived. Inventory is expected to show a decline from October, but a substantial increase from a year ago. Demand from the food service industry will remain substantially lower for the foreseeable future.
