OPENING CALLS:
| Class III Milk Futures: | Steady to 4 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 7 to 10 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | Mixed |
MILK:
Milk futures are expected to remain choppy as traders continue to scalp the market, taking small profits if they develop. Many traders are not taking long-term positions as there is no definite trend developing. Later months are moving near the low end of the range of support while April through June Class III contracts made new lows again Monday. Underlying cash prices are expected to remain choppy, which will continue to erode milk futures as premium is taken out of the market. Milk futures will bounce, but those increases are becoming more difficult to uncover and maintain. The January Agricultural Price report will be released today, providing most of the prices used in calculating income over feed for the Dairy Margin Coverage program. The soybean meal price is not on that report and is calculated and released by the FSA generally the following morning. A payment is expected as income over feed should be below $9.50.
CHEESE:
Buyers were looking for cheese again Monday and had difficulty finding what they needed even at higher prices. This does not mean supply is tight, but sellers were not anxious to sell as long as prices were increasing. We have been seeing both buyers and sellers hold back, depending on strength or weakness as they wait for the right price to buy or sell. Sufficient cheese is available for needs.
BUTTER:
Growing butter inventory will limit upside price potential. Churning is active, allowing for sufficient supply to satisfy current demand and to build inventory. The growth of inventory is not bearish as the industry wants to have a larger supply available for the second half of the year. This is the time for building inventory to prepare for higher demand. Some buyers are already focusing on procuring third quarter needs.
