Opening Calls:
| Class III Milk Futures: | 5 to 15 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | Steady to 1 Lower |
Outside Market Opening Calls:
| Corn Futures: | 1 top 3 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 3 to 5 Higher |
Milk:
The strength on Friday in Class III milk futures did carry over last night, but activity was confined to the February through April contracts. March and April were higher at one point overnight but have backed off from those highs. That does not necessarily mean anything as activity generally increases as the morning progresses. It is still unclear as to the strength milk futures exhibited on Friday, but it seems to be tied to hopes that the stimulus bill will contain money for increased purchases of dairy products for food programs. The current Farmers to Families Food Box program and the increase in Supplemental Nutrition Assistance Program money has not been able to support prices. More money through the stimulus could increase more demand to feed those who are in need. This would certainly be good as there is plenty of milk available for consumption and processing. Increased demand would go a long way in providing price support. The greater issue might still be processing capacity as we move through spring flush.
Cheese:
The large gain in cheese prices on Friday were a surprise to traders. It will be interesting to see if the increase will bring more buyers back into the market in order to purchase cheese before prices increase much more. Or buyers may look to regular supply channels to obtain product rather than come to the spot market. Up until Friday, cheese supplies were plentiful and inventory was growing. That did not change overnight. Traders will be viewing this with caution as it could be a short-lived rally again.
Butter:
The fundamentals of butter have been more bearish than cheese and that was clearly evident last week. If demand increases from buying through government food programs, it still may not be sufficient to reduce inventory for the time being. Demand is holding well, but not enough to utilize production. Price is expected to be choppy to lower.
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