OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 2 Higher |
| Soybean Futures: | 2 to 4 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | Mixed |
MILK:
Milk production continues to increase as seen in the November report yesterday. It was the fifth consecutive month in which milk production has outpaced last year. Lower milk prices may cause this to slow over time, but it may not take place anytime soon. Feed is available and cows are settled in for the winter. Producers will focus on improving production per cow and increasing cow numbers internally. Milk production may not grow by leaps and bounds but should see a steady increase. February Class III closed below $19.00 and is back to the lowest level it has been since late January. The January and March contracts are holding on just above $19.00. Schools will be closing this week for the holidays moving more milk to manufacturing.
CHEESE:
Prices will remain choppy. Cheese may be well-priced for now with limited upside price potential. Regular demand will be met with current production. Inventory will likely build as usual during the first part of the year. More milk will be processed into cheese over the next two weeks as bottling milk is diverted.
BUTTER:
If the pattern is followed, price may bounce back today as buyers look to take advantage of the drop in price. Price swings over the past two weeks have been unprecedented as buyers and sellers uncover voids in the market. Price generally moves in a trend rather than being whiplashed.
