OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | 6 to 8 Lower |
| Soybean Meal Futures: | $2 to $4 Lower |
| Wheat Futures: | 6 to 8 Lower |
MILK:
Milk futures lack the support to trend higher. The recent friendly milk production report was pointing ahead to support down the road if cow numbers continue to decrease. Current milk supply is sufficient for demand, keeping plants running mostly full. Inventories are building as they generally will during the first half of the year. Overall weather continues to be good for cow comfort and feed intake. USDA will release the December Agricultural Prices report Tuesday, providing the average prices used in calculating income over feed used for the Dairy Margin Coverage program. That is except for soybean meal as that is an average calculated on a weekly basis and released by the Farm Service Agency. I am not expecting a payment under the program as income over feed should be above the $9.50 payment level. The Bi-annual Cattle Inventory report will report the number of dairy cows and heifers in the nation's herd on Jan. 1.
CHEESE:
The volatility of spot cheese keeps traders guessing as to price direction. It is also sending traders to the sidelines as they wait it out. Traders have some premium in cheese futures but are not overly optimistic. However, low prices and the potential for increased culling and maybe a tighter milk supply later in the year should keep premium in the market.
BUTTER:
The bounce of butter price is expected to be minimal and short-lived. Supply is readily available with churning active. International butter prices are lower, which may eventually impact export activity. Butter futures have limited premium to current cash in later contracts.
