OPENING CALLS:
| Class III Milk Futures: | 2 to 5 Lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 1 to 3 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | Mixed |
MILK:
Milk production in January increased more than expected, which means there will be plentiful supplies of milk available for both bottling and manufacturing. Milk production per cow up 18 pounds is rather significant as cows are being pushed to produce to make up for lower milk prices. The idea that culling might be following a similar pattern as a year ago earlier than anticipated was put to rest Wednesday with an increase of 9,000 cows from December. This reverses the loss of cows from November to December and then some. This may leave buyers unaggressive in the cash markets as they see sufficient supplies of dairy products available to the market. Rather than current milk futures being too low -- as many have suggested -- they may be about right for current supply and demand. The January Livestock Slaughter report will be released Thursday.
CHEESE:
Milk production in January with likely the trend continuing through February indicates there will remain sufficient supply for manufacturing. The January Cold Storage report will be released Friday and it is possible American cheese inventory may not show much of a gain compared to a year ago or even a gain at all. Weekly cold storage reports are not indicating inventory is increasing. However, total cheese inventory is expected to increase. Cheese buyers may be less aggressive, seeing the milk production level of January and current strong production.
BUTTER:
Butter inventory may be increasing more than usual according to weekly cold storage holdings. Active churning with plentiful cream supply has provided for demand and inventory growth. There has been desire to increase inventory to a more comfortable level and that may be taking place more rapidly than usual. Price should remain in a tight range.
