OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 2 Higher |
| Soybean Futures: | 3 to 5 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | Steady to 2 Higher |
MILK:
January, February and March Class III futures closed below $19.00 showing the weakness that has moved into the market. Underlying cash is weaker as buyers of cheese and butter have needs covered for the time being. Strong milk production leaves sufficient milk available for bottling and manufacturing. Schools will be closing with more milk diverted to manufacturing over the next two weeks. Spot milk prices are expected to decrease due to the volume of extra milk available on the spot market. Class IV futures are expected to show further weakness as buyers of butter in the spot market may not be aggressive. Futures are expected to be choppy prior to spot trading.
CHEESE:
The block/barrel spread moved to 34.50 cents yesterday showing the weakness of barrels due to slowing demand and higher supply. Traders did not put much emphasis on block price moving back to unchanged yesterday as the attitude has turned more bearish. Cheese supply is sufficient for demand.
BUTTER:
It was a bit of a surprise that butter did not bounce back yesterday and continued to decline substantially. This may keep buyers sidelined unless they need to fill orders and are unable to find supply out in the country. One would think lower price would spur some buyer interest for next year but increasing production should keep sufficient product available to the market.
