OPENING CALLS:
| Class III Milk Futures: | 2 to 7 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Lower |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $3 to $ Higher |
| Wheat Futures: | 4 to 6 Lower |
MILK:
Milk futures moved higher during the second half of the week, posting some nice gains. Underlying cash cheese did not support the move as both blocks, barrels, and dry whey closed lower for the week. Class IV futures were supported with gains in butter and nonfat dry milk. The attitude seems to have changed from being bearish to slightly more bullish. This is likely due to buyers stepping out to forward purchase some supply at the lower prices. Milk production is steady to higher, which will keep sufficient supply available for demand. It will be interesting to see whether the decrease of cow numbers on the milk production report for December will be evident again on the January report. If so, then there would be cause for higher prices as the year progresses as culling may again be increasing. Feed prices do not look to be any less expensive for the foreseeable future.
CHEESE:
Current prices are attractive to buyers as they look back to last year. However, the current market does not carry the same attitude as last year. There was fear of a tight supply last year, which drove prices to record levels, even though milk was available and cheese inventory was at record highs. The market currently does not carry the same fear, which may leave it choppy.
BUTTER:
Price has been creeping higher the past two weeks as more buyer interest surfaces to begin purchasing ahead for future needs. Price a year ago was $2.7850. However, with current churning activity and cream availability, buyers are not as aggressive as they were a year ago. The recent price increase may be near buyer resistance based on supply.
