OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 1 to 4 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | Mixed |
MILK:
The rebound of closer Class III milk futures was nice to see, but the rebound failed to eliminate the loss of the previous day. Traders are not convinced the market will trend higher anytime soon. However, there seems to be some support due to the friendly aspect of the December Milk Production report showing a decrease in cow numbers from November. This may be setting a trend and if so, milk production may slow more rapidly than anticipated. Currently, milk production is steady to slightly higher across much of the country. Some lighter production is seen in California where rains have been heavy and open lots muddy. The large adjustment of 32 cents higher made in Class IV futures yesterday was in response to the weekly AMS prices. I have never seen an adjustment of that magnitude in reaction to weekly prices.
CHEESE:
There was a lot of trading activity in spot barrels yesterday. Buyers needed and wanted to pick up supply at lower prices and were able to find willing sellers. What is interesting is that even though buyers were more aggressive, sellers did not hold back as they many times do when seeing strength. Cheese supply is sufficient for demand.
BUTTER:
Butter is in an overall downtrend but is slowly declining. Buyers are obtaining sufficient supply in the country through regular channels leaving limited activity on the spot market. Supply is increasing and running above a year ago. Cream is readily available keeping churning active. Nonfat dry milk remains weak.
