OPENING CALLS:
| Class III Milk Futures: | 4 to 6 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 2 Lower |
| Soybean Futures: | 6 to 8 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 6 to 8 Lower |
MILK:
Some milk futures contracts settled lower Tuesday, even though underlying cash did not have an impact on the cash calculation. The main reason for the weakness in Class III futures was the swing in the barrel cheese price during spot cheese trading Tuesday. The price was initially higher before increased selling pressure moved the price lower into the close. It is difficult to guess what will happen Wednesday, but the overall cash market gives the impression prices may remain supported for now. The January Federal Order class prices will be announced Wednesday. The Biannual Cattle Inventory report to be released is expected to show lower heifer numbers and a lower percentage of heifers to cows from a year ago. The Agricultural Prices report is not expected to show much of a change in income-over-feed from the previous month.
CHEESE:
Cheese production is steady with demand steady overall. Buyers have been more active in the cash market, which has increased prices over the past two weeks. Buyers may reach a price threshold soon.
BUTTER:
Price has been able to hold the recent gains, which may indicate the market is supported for the longer term. Churning is active but inventory is below a year ago. That indicates good demand. If exports improve, the butter price might increase as the year progresses.
