Opening Calls:
| Class III Milk Futures: | 5 to 20 Lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 1 to 2 Lower |
Outside Market Opening Calls:
| Corn Futures: | 2 to 5 Higher |
| Soybean Futures: | 6 to 12 Higher |
| Soybean Meal Futures: | $1 to $3 Higher |
| Wheat Futures: | Mixed |
Milk:
Selling pressure may continue Tuesday as the December Milk Production report was bearish. Production continues to increase as cow numbers grow along with milk per cow. This confirms the reports of milk plants already running at capacity with some diverting loads of milk as they can for the time being. This may change as there have been reports that plants may soon have to begin enforcing production quotas again for a period of time. However, increased demand from food programs may utilize a larger portion of increasing production than usual during this time of year. That would help limit some inventory build or the amount of milk available at a discount on the spot market. Traders anticipate further weakness of cheese prices based on Class III milk futures.
Cheese:
Cheese prices remaining unchanged did not temper the selling pressure Monday as traders anticipate further weakness of cheese prices. The Cold Storage report was bearish showing the second consecutive month of inventory build for American cheese rather than the usual decline. Buyers may hold back due to there being sufficient supply available even though demand for government programs is increasing.
Butter:
Price may be in further trouble as inventory continues to build. December stocks being an incredible 44% above December 2019 does not bode well for price. Butter does not age and can be brought out and sold on the spot market at any time unlike cheese. This makes the current situation much more bearish as it will take some time to reduce inventory. This is the highest December inventory since 1993. Further price weakness is expected.
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