OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 2 Lower |
| Soybean Futures: | 5 to 8 Higher |
| Soybean Meal Futures: | $3 to $5 Higher |
| Wheat Futures: | 4 to 6 Higher |
MILK:
Buying was triggered in Class III futures Wednesday despite the weakness of dry whey and barrel cheese. Dry whey showed the first price decline since Dec. 21. At the same time as spot trading was taking place, the World Agricultural Supply and Demand (WASDE) report was released. Traders decided to put more emphasis on the reduced milk production estimate and estimates for higher milk and product prices. This sent Class III futures significantly higher. These were just estimates but it was enough to trigger strong buying interest. This shows a change in market psychology as this report has not been much of a market mover in the past. There was no other fundamental change in the market. Class IV futures had further support due the increase of butter and nonfat dry milk prices Wednesday. The value of dairy exports in December totaled $602.2 million, up 17.5% from December 2020. This sets a new record with a value of exports at $17.751 billion surpassing the previous record set in 2014.
CHEESE:
It will be interesting to see if spot trading today will be influenced by WASDE report like milk futures trading was. The weakness of dry whey yesterday may be short lived, but high price may be having an impact on demand. However, price is not expected to decline very much if it does.
BUTTER:
Buyers and sellers seem to be comfortable with a sideways price range possibly developing. Butter output is slowly improving. Both domestic and world demand remains strong. Grade A nonfat dry milk moved to a new multi-year high Wednesday providing strong support to Class IV prices.
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