Opening Calls:
| Class III Milk Futures: | 10 to 60 Higher |
| Class IV Milk Futures: | 10 to 15 Higher |
| Butter Futures: | 2 to 3 Higher |
Outside Market Opening Calls:
| Corn Futures: | 1 to 3 Higher |
| Soybean Futures: | 6 to 10 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 2 to 4 Lower |
Milk:
Traders continued to remain excited over the potential increase of demand due to money appropriated under the stimulus bill for food programs and for reimbursement to dairy processors for donations made to food banks. It is yet unclear as to how this will all be implemented and distributed, but it does provide for increased demand. Just how far milk futures will be able to rise is up to continued buying interest in the cash market. Buyers were aggressive Tuesday right from the start of spot cheese trading with bids continually raised. It is unclear just how aggressive buyers will be without knowing the specifics of how all of the stimulus money will be distributed. Class III futures are showing some very strong prices in anticipation. February and March contracts moved quickly above $18.00 last night, leaving a large price gap on the daily price charts as liquidation continues to take place.
Cheese:
Cheese buyers were aggressive Tuesday right from the opening of spot trading. Some buying may have been tied to the desire to get ahead of the potential for greater demand through food aid, while some of the buying might have been due to buyers wanting to rebuild aging programs and to purchase at the lowest price possible for storage. This may continue Wednesday as the increase may bring in more buyers from the sidelines.
Butter:
Butter did not show quite the same strength, but it certainly showed some strength. It will be interesting to see how the market will react over the next few weeks due to the bearishness of the Cold Storage report. A decline of inventory of 47.9 million pounds from October was supportive to the market. However, stocks 71.2 million pounds, or 39% higher than last year, is not friendly to the market. On top of that, churning remains very active. Price is not expected to move very much.
