OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 20 to 25 Higher |
| Soybean Meal Futures: | $5 to $6 Higher |
| Wheat Futures: | 2 to 4 Higher |
MILK:
Milk futures fell back Tuesday, likely due to prices being overdone to the upside the previous few days. There also is some concern that buyers have purchased quite a bit of product for the near term and do not need to be very aggressive for now. Milk production is not much different than it had been a year ago even though cow numbers have declined. This keeps sufficient milk available for bottling and manufacturing. There has been concern that continued reduction of the dairy herd would tighten milk supply, but those fears have been alleviated to some extent as production is holding. It is still possible milk supply could tighten with demand for dairy products holding strong or potentially improving. That is why milk futures are at current price levels. Traders placed bids and offers last night with little interest in moving them. USDA will release the January Federal Order prices Wednesday.
CHEESE:
Buyers have been trying to increase ownership after the price break but have a difficult time purchasing product due to limited interest in selling. This pushes prices back up without accomplishing much. Buyers step back when the market shows weakness while sellers step back when prices strengthen. This does not take place every time, but it is a common occurrence when supplies are sufficient, and buyers purchase on an as-needed basis.
BUTTER:
The weakness of butter Tuesday was a bit of a surprise as it was expected to regain more of the loss of last week. Churning activity is improving which puts supply on the market. However, the larger influence may be that buyers have already purchased supply ahead and do not need to be as aggressive for the time being. Further weakness is possible Wednesday.
