| Class III Milk Futures: | 5 to 15 Higher |
| Class IV Milk Futures: | 10 to 5 Higher |
| Butter Futures: | Steady to 1 Lower |
| Corn Futures: | 4 to 6 Higher |
| Soybean Futures: | 14 to 20 Higher |
| Soybean Meal Futures: | $4 to $6 Higher |
| Wheat Futures: | 5 to 8 Higher |
Class III milk futures had a strong second half of last week. Higher spot cheese prices turned the market around as traders thought the bottom might be in again and cheese buyers stepped back up to the plate. Class IV futures rebounded as well, but they had not declined as much as Class III and remain close to the highs. General fundamentals are similar to what they had been over the past weeks, but the heightened volatility will continue. Traders are wound up and ready to react over any movement of underlying spot prices. Cow numbers are below a year ago while milk per cow remains above year ago levels. This is offsetting much of the loss of cow numbers with December milk production only 0.1% below a year ago. A winter storm moved up through the Northeast, which will impact milk production, hauling, processing and delivery of dairy products to some extent. However, it is not expected to have much impact as far as loss of milk or product. USDA will release the December Agricultural Prices report Monday. The report will contain average prices for the month used in the calculation of income over feed, determining whether there will be a payment under the Dairy Margin Coverage Program.
CHEESE:The rebound of cheese may have set the stage for further buying this week. Buyers had been holding back waiting to see how much prices would decline. Now that prices rebounded, it may bring more buyers back into the spot market in the attempt to take advantage of lower prices. This may result in sellers holding back. Buyers may need to chase the market higher, resulting in little benefit by waiting for lower prices.
BUTTER:It was interesting to see the sharp decline of butter price last week had limited impact on Class IV futures. The increase of butter on Friday moved Class IV futures back up near the highs again. Butter production is slowly increasing but inventory remains substantially below year earlier levels. Price may regain more of the loss of last week.
