OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 4 to 7 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 7 to 9 Lower |
MILK:
Milk futures have been unable to hold the gains from Tuesday with contracts back down to where they were or slightly lower than a week ago. Milk production continues to remain steady to slightly higher, leaving sufficient milk supply for demand and then some. With spot milk still being offered as much as $10.00 below class in the Midwest, the industry has basically no concern over supply. With strong cull cow prices and lower milk checks, culling may increase over the next few months as farmers may increase culling to reduce feed costs and to increase income. Increased milk production in January and higher cow numbers will linger in traders' minds for a while, keeping upside price potential limited and may keep cash buyers less aggressive due to sufficient milk supply.
CHEESE:
Cheese futures do not have much premium put into contracts through the year. There is some optimism, but the market needs proof that even current prices will be achieved. So far, prices have not been able to trend higher as any price increase has been short-lived. USDA will release the January Cold Storage report Friday. There may not be much growth in American cheese inventory, but the other categories and total cheese are expected to show growth.
BUTTER:
Butter inventory is expected to show a significant increase during the month of January. Churning has been active with plants utilizing plentiful cream supply. The intent was to build inventory to a more comfortable level and that is being accomplished. A large portion of bulk butter is being put into freezers for later demand. Even with inventory growth, downside price potential is limited.
