OPENING CALLS:
| Class III Milk Futures: | 5 to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 4 to 7 Higher |
| Soybean Meal Futures: | $5 to $7 Higher |
| Wheat Futures: | 3 to 5 Higher |
MILK:
The strength seen in the first half of the year in Class III futures was less than expected in relation to the increase in cheese prices. Traders are being reactive but cautious. A move of that magnitude in cash cheese had to trigger short covering and buying interest as traders are mainly scalping the market with short-term trades. The price increases yesterday may be short-lived if the pattern of the past few months remains intact. USDA announced additional assistance to dairy farmers yesterday. A second round of payments through the Pandemic Assistance Program and an added Organic Dairy Marketing Assistance Program will be implemented for fluid milk sales between 5 million to 9 million pounds of milk sold from July through December 2020. Payments to farmers will be distributed through independent handlers and cooperatives.
CHEESE:
There is concern the jump in cheese prices yesterday may again result in a void under the market once sellers attempt to sell product at the higher prices. Buyers may again step back resulting in another quick decline. There is sufficient cheese supply for demand with cheese production strong and milk supply available.
BUTTER:
Price seems to be weakening as churning is active and supply is slowly increasing. The December Cold Storage report will be released tomorrow, and I anticipate butter inventory to show supply nearly at the same level as 2021. That would be incredible given the fact that inventory was 22 percent below 2021 in August. Price may see further weakness today.
