OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 2 Higher |
| Soybean Futures: | Steady to 2 Higher |
| Soybean Meal Futures: | $2 top $3 Higher |
| Wheat Futures: | 6 to 8 Higher |
MILK:
Monday was a good day for milk futures as steady to higher cash prices increased short-covering and new buying interest. Class IV futures pushed to new highs while Class III futures showed further strength, but have a long way to go to reach back to the highs. It is interesting to see the movement of underlying cash. Earlier last week, buyers were not interested in buying cheese or butter unless prices declined. However, now that buyers stepped up to take advantage of lower prices, they became more aggressive. This is what the underlying cash market does. When buyers need product, they will be more aggressive bringing other buyers into the market. The opposite is true with price weakness as buyers will step back. This leaves milk futures gyrating in response to underlying price movement. Class IV futures continue to significantly outpace Class III futures. Tuesday is the last trading day for January dairy futures and options.
CHEESE:
Buyers were aggressive Monday as they wanted to take advantage of lower prices. However, it is not working very well as prices have increased without the ability to purchase any loads. Waiting until price found support before stepping in has not netted much benefit. Further strength might be seen Tuesday.
BUTTER:
Price held Monday with one load traded. Price may be at a level at which buyers and sellers may be comfortable for the time being. Butter production is slowly improving but supply remains tight for bulk butter and inventory will take some time to build.
