Opening Calls:
| Class III Milk Futures: | 20 to 75 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | 1 to 2 Lower |
Outside Market Opening Calls:
| Corn Futures: | 2 to 5 Higher |
| Soybean Futures: | 15 to 25 Higher |
| Soybean Meal Futures: | $2 to $4 Higher |
| Wheat Futures: | 5 to 10 Higher |
Milk:
Class III milk futures exploded overnight with some contracts reaching limit up shortly after trading opened. Trading volume is one of the largest I have seen with contracts through February 2022 showing activity. I have yet to see any solid reason for support for the huge turn-around from Monday. There has been no press release from the government over a food program and there have been no solicitations put out for the purchase of dairy products for any program as of Tuesday morning. This is like what took place in the market just before Christmas, but that was a reaction to the stimulus bill and a jump in cheese prices. Traders certainly are excited over something that has rippled through the market. The only other news was from Citi Bank, which indicated that China's Mengniu Dairy has positioned itself over the past few years to better meet the higher demand for dairy products in China. Some news over a Food Box program or support from underlying cash will need to follow Tuesday or this will be an emotional rally. It might be an indication as to the volatility we may be facing this year.
Cheese:
The movement of cheese prices Monday certainly does not support the strength of milk futures overnight. The weakness of cheese prices Monday would suggest further weakness Tuesday. However, the trade does not think so. Cheese futures showed a high volume of trades with February and March limit up. It certainly will be an interesting day.
Butter:
Butter futures have not followed the exuberance in cheese and Class III futures. Some contracts were traded, but there has been little market movement. Overall weakness is the dominating factor in the market as supply is readily available and churning active. Price is expected to remain choppy.
