Wednesday Morning Dairy Market Update - No Trading Overnight

 Opening Calls:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

Outside Market Opening Calls:

Corn Futures:	1 to 2 Higher
Soybean Futures:	4 to 7 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	Mixed

Milk:

Without any trading overnight, it is difficult to get an idea as to price direction up until spot trading. No further short-covering is needed to be accomplished and no aggressive selling took place. The activity of underlying cash Tuesday leaves traders questioning whether the market has much more upside price potential. There has been little change in market fundamentals, which makes prices susceptible for weakness as buyer interest is satisfied. More milk is being made available for manufacturing as bottlers are already making arrangements with buyers for the extra milk that will be available over the holiday period. It will not be as much milk as there generally is due to school accounts being much reduced already this year in many cases, but increased milk production and schools that are open being shut down will leave plentiful supply that needs to find a home.

Cheese:

Traders were cautious overnight, placing bids and offers in the market, but unwilling to move those positions to accomplish any trading. The inability of blocks to hold the higher price Tuesday is cause for some concern as to whether buyer threshold has been reached. However, buyers have been standing in the market to purchase as regular orders need to be filled with some purchasing to build inventory taking place. Prices could go either way Wednesday.

Butter:

Price continues to exhibit strength as retail demand is strong. Buyers are purchasing for first quarter needs as well as filling orders through the end of this year. Churning is active utilizing available cream. Supply is readily available for demand. Inventory is declining, but at a lesser pace than usual, which could leave inventory substantially higher at the end of the year compared to the previous year.