OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 2 Higher |
| Soybean Futures: | 6 to 9 Higher |
| Soybean Meal Futures: | $3 to $4 Higher |
| Wheat Futures: | 4 to 7 Higher |
MILK:
April Class III futures bounced above $18.00 overnight, but are unlikely to hold unless there is further support from stronger cash. The choppy nature of cash will leave traders cautious and keep them taking only short-term positions to scalp the market for a potential profit. There is little anticipation of a higher trend anytime soon. Milk supply is sufficient, leaving plants running on full schedules. Spot milk continues to be available at a discount, leaving plants with easy access to extra supply. The band of winter weather and ice moving across parts of the South will cause some delays, but it is not expected to have much impact on overall milk supply. We still do not know the full extent of the impact of rain on California production, but the latest reports indicated production in the state to be steady to slightly lower. Otherwise, weather is good in the rest of the nation.
CHEESE:
Prices are expected to chop around at these lower levels for a period. With increased cheese production and current variable demand, inventory is expected to increase as it generally does during this time of year. This eliminates any concern of supply for the foreseeable future. Forward contracting from end users has been slow to develop with buyers mostly content to purchase on an as-needed basis.
BUTTER:
Price may have found a level of support for the time being. However, with many plants running on full schedules due to cream being plentiful, inventory is increasing. This may keep a lid on price potential for the time being. The December Dairy Products report will be released Friday, which will provide the level of output during the month.
