Opening Calls:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
Outside Market Opening Calls:
| Corn Futures: | Steady to 2 Lower |
| Soybean Futures: | 1 to 3 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | Mixed |
Milk:
Traders will be cautious prior to spot trading. Futures bounced Friday despite further weakness of blocks as futures needed to move in line with cash. Futures are back to a somewhat normal market with contracts exhibiting a seasonal curve. USDA will release the December Milk Production report Monday afternoon. I estimate milk production to be up 2.95 from a year ago. I estimate cow numbers to be up 6,000 head. There has been strong incentive to continue to produce milk, which has kept barns full. The livestock slaughter report showed a significant increase of dairy cattle slaughter in December, but it is likely there were more heifers entering the milking string, requiring increased culling. There has been no incentive to reduce herd numbers. That may be coming sooner rather than later as plants begin to implement quotas again in preparation of spring flush.
Cheese:
USDA will release the December Cold Storage report Monday afternoon. December is generally a pivotal month during which inventory may remain near the level of the previous month or begin to show an increase of stocks. Inventory level could go either way compared to the previous month or a year ago. It does appear that increased production is allowing more cheese to be available out in the country, reducing the need for buyers to come to the spot market to obtain supply.
Butter:
On the other hand, butter inventory is expected to show a decrease from November, but a substantial increase from the previous year. Supply is readily available for demand, keeping price under wraps. Churning remains active with plants having a difficult time balancing supply with demand. Most are churning and adding to inventory.
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