| Class III Milk Futures: | 5 to 10 Lower |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | 1 to 2 Lower |
| Corn Futures: | Mixed |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 7 to 11 Higher |
Class III milk futures retraced substantially over the past week, following cheese prices lower. Milk prices still look good but not as good as they had. Traders feel there is limited downside to the market and that this is a price correction. However, the weakness of cheese prices has been a little more than anticipated. Buyers have not yet stepped up to take advantage of the price weakness to increase ownership for later demand. The milk production report was neutral but does give some indication that cow numbers and milk production might be stabilizing. This may alleviate some of the concern that milk supply would continue to tighten as the year progressed.
CHEESE:The December Cold Storage report indicted that there is plenty of cheese available. This may temper some of the aggressive buying that we have seen over the past two months. Demand for fresh cheddar may keep price supported on the daily spot market. However, buyers may not be interested in building more inventory but rather purchase on an as-needed basis.
BUTTER:Butter inventory continued to decline in December as expected. The fact that supply is 27% less than a year ago, should continue to provide support to the market. However, even though supply is lower, production is increasing. There is sufficient supply to supplement fresh production to meet demand. The decline of price Monday was a surprise. If the pattern holds true, buyers should step back in and take advantage of the price decline to increase ownership
