OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Lower |
| Soybean Futures: | 7 to 10 Lower |
| Soybean Meal Futures: | $4 to $6 Lower |
| Wheat Futures: | Steady to 2 Higher |
MILK:
It is tough to anticipate market direction. Futures have fallen substantially since mid-November but seem to be trying to establish a bottom. However, the market is not driven by milk futures but by the underlying cash prices. They hold the key to price direction and currently there is little to indicate a change in the recent volatility with prices going nowhere. As time moves forward, milk is expected to remain sufficient for needs with inventory of dairy products expected to increase. Cheese and butter production is increasing as milk output remains above a year ago. The big question is demand. The December Consumer Price Index was +6.5 percent which is indicating a slowing of inflation. However, it is still high and a concern as consumers continue to see high food prices.
CHEESE:
The weakness of cheese on Friday might extend over into Tuesday as buyers may continue to hold back. If there is any desire to purchase to rebuild aging programs, buyers will want to do it on price weakness. They see no need to be aggressive.
BUTTER:
Production continues to increase due to plentiful cream supplies. This will easily meet demand and rebuild inventory. Limited forward contracting is being done as buyers anticipate further weakness at some point. This may keep price rangebound for a time as supply and demand is assessed.
