OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 5 to 9 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 2 to 4 Higher |
MILK:
Overall, Class III futures continue to struggle with contracts testing the lows or making new lows. The choppiness of underlying cash leaves the market floundering. Strong milk production continues keeping the market well supplied with milk for both bottling and manufacturing. Class IV futures continue to hold a premium over Class III, but that premium has eroded recently as nonfat dry milk price has weakened. The average soybean meal price for January has yet to be released by the FSA. My anticipation is for there to be a payment for those who chose the $9.50 price level for the Dairy Margin Coverage program.
CHEESE:
A wide block/barrel spread continues and is not expected to change anytime soon. Barrels are more available to the market, keeping buyers less aggressive. Blocks are trying to move back up to the price they were a week ago but may have a difficult time achieving that level. Unchanged prices Tuesday did not provide market direction as buyers and sellers never showed up. They may be waiting to see who will be more aggressive.
BUTTER:
Price seems to be supported but expected to have limited upside potential. Active churning leaves sufficient supply available for demand as well as to build inventory. Some buyers are already working on third quarter expected demand. Nonfat dry milk is a different story as sufficient supply keeps buyers satisfied with no need to be aggressive on the spot market. Price could retest the lows 3 cents lower. This is keeping pressure on Class IV futures.
