OPENING CALLS:
| Class III Milk Futures: | 5 to 15 Lower |
| Class IV Milk Futures: | 4 to 10 Lower |
| Butter Futures: | 2 to 3 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 4 Lower |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | Steady to $1 Lower |
| Wheat Futures: | 10 to 15 Lower |
MILK:
Milk futures are under pressure and will remain that way as long as underlying cash prices show weakness. Milk production is steady even though cow numbers continue to decrease. However, the production report for December seems to indicate that culling might be slowing with production per cow increasing. If milk prices weaken too much over the next few months, cow numbers will be less likely to increase. The addition of cows to existing facilities and expansions will be limited. Farms are doing a balancing act as the winter months unfold. Costs are high and there is difficulty getting certain goods, resulting in finding some alternatives right now. This is not going to change anytime soon as a report on Tuesday indicated around 70% of the nation's goods are moved with semi-trucks. At the present time, it is estimated the trucking industry has a shortage of 80,000 truck drivers. This affects the farming industry receiving goods as well as affecting the ability to deliver dairy products on schedule. This makes products more expensive.
CHEESE:
Buyers have purchased sufficient cheese for expected demand earlier and have limited interest in purchasing now. Buying is taking place on a limited bases on the spot market as cheese is available in the country, allowing buyers to already purchase for second quarter orders or expected demand. End users are ordering ahead of time to receive supplies when they need it. This changes the seasonality of the market.
BUTTER:
There is concern the market may have reached a top as buyers have increased ownership sufficiently to slow purchases. World price remains high with strong demand with the U.S. price in line with world price. Increased churning activity will provide more butter for the domestic market over time.
