OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures | 4 to 8 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 3 to 5 Higher |
MILK:
Class III milk futures are clawing their way back up again. April closed above $18.00 Wednesday with overnight trading moving February closer to $18.00. The February contract is running out of time to be affected by underlying cash movement as it will mostly be priced by the trade at the middle of next week. One has to wonder if spot prices have found a bottom and will trade steady to higher moving forward. There is sufficient milk available for both bottling and manufacturing, which leaves supply readily available for all needs. Traders focused on the strength of block cheese Wednesday to support Class III futures rather than the weakness of barrels. Markets may continue to remain choppy. Dairy exports in 2022 set a record with the value of exports over $9.6 billon, an increase of 25% over 2021. Volume totaled over 2.4 million metric tons (mmt), up 15%.
CHEESE:
Cheese prices are expected to remain choppy as the market balances supply and demand. Cheese production is strong with milk supply readily available and spot milk holding a large discount to class. Much of the buying is for immediate needs with more moving to inventory. Prices are expected to remain choppy with limited upside.
BUTTER:
Price has been increasing over the past 1 1/2 weeks but may be at some resistance. Strong churning activity is providing sufficient supply for demand with inventory increasing significantly. Some buyers are reaching out to obtain supplies for later needs, anticipating price may have limited downside potential. Waiting for the potential of lower prices is not in their best interest when looking ahead to the year and comparing price to a year ago.
