OPENING CALLS:
| Class III Milk Futures: | 2 to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 1 to 3 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 1 to 2 Higher |
MILK:
It was surprising milk futures were not under further pressure in overnight trade. However, the bearishness of the December Milk Production report may have a greater negative influence Thursday. On the other hand, Class III milk futures have already had some of it factored in with the decline of prices over the past few days. Milk production will remain sufficient for demand as farmers are not culling cows as had been expected. This may result in lower milk prices longer than expected. The positive inventory level for butter in the December Cold Storage report should support the butter price and support Class IV futures, which will hold a substantial premium over Class III prices. USDA will release the December Livestock Slaughter report Thursday which contains a report on dairy cattle slaughter for the month.
CHEESE:
Overall cheese inventory closed the year near the same level as a year ago. Manufacturers did a good job of limiting the growth of cheese supplies. Cheese demand has been good but not good enough to reduce inventory and tighten supply. This may keep prices in a range for a period.
BUTTER:
Price is not expected to trend higher due to December butter inventory ending the year 8% below a year ago. However, it may keep the price in the current range or somewhat higher through the first half of the year.
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