Opening Calls:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
Outside Market Opening Calls:
| Corn Futures: | 7 to 10 Higher |
| Soybean Futures: | 25 to 30 Higher |
| Soybean Meal Futures: | $6 to $10 Higher |
| Wheat Futures: | 4 to 8 Higher |
Milk:
The beginning of a new year does not change the market. Fundamentals remain the same and increased demand from further financial support for food programs as appropriated on the stimulus bill is uncertain. Any increase in demand is always good, but it looks as if the increase in demand will come from increased government purchases through programs already in place and not from additional programs. Anything can happen as it did last year, and markets will react accordingly. Milk production continues to increase seasonally as it has been a mild winter so far. Cow numbers continue to increase with increasing milk production per cow. This trend is not expected to slow anytime soon. This will require increased demand to keep up with production or milk prices could decline as inventory would then build.
Cheese:
Based on how spot cheese trading closed last week, it points to increased prices Monday. Buyers have not been overly aggressive, which may be the reason milk futures have not followed suit. It seems that current buying is for rebuilding aging programs and for contracted orders. It does not seem to be in anticipation of a surge in government buying. It is too early for that. USDA has not put out any solicitations so far. Cheese output was heavy over the past few weeks as greater volumes of milk were available on the spot market at attractive prices.
Butter:
The outlook for butter is not very promising at this point. Inventory closed the year substantially higher than the previous year. Inventory may increase more rapidly now that holiday demand is finished. Churning has been active. Most plants have not reduced production to balance with demand due to heavy cream supplies are reasonable prices. Price could resume the downtrend.
