OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 5 to 8 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 7 to 10 Higher |
MILK:
Milk futures showed weakness yesterday in line with underlying cash. Traders are concerned about further weakness due to the lack of follow through buying in the spot market yesterday. USDA will release the December Milk Production report this afternoon. I estimate milk production to be up 1.2 percent from a year ago and cow numbers to show an increase of 2,000 head. Milk per cow is expected to be higher similar to what it has been much of the year. The December Cold Storage report will also be released at the same time. American cheese inventory may not have changed much from the previous year. Butter inventory may be near the same level it was a year ago.
CHEESE:
The slight weakness of cheese yesterday may keep buyers on the sidelines today. Sellers tested the market slightly but came up empty which may mean they will need to be more aggressive today if they intend to move product. Buyers are not concerned over supply and will purchase as necessary for immediate demand and wait for lower prices for building inventory for later demand.
BUTTER:
Price may see further pressure as supply is readily available and world demand is softening. How much more weakness we will see is difficult to predict. Increased production and lighter demand can rebuild inventory rapidly. There is a strong possibility the cold storage report may show butter stocks near the same level they were a year ago. This could set the stage for a significant inventory build this year.
