OPENING CALLS:
| Class III Milk Futures: | 10 to 20 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 5 to 6 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 5 to 7 Higher |
MILK:
The decrease in milk production in January of 1.1% in the U.S. and the decrease in cow numbers by 23,000 head puts the market in a somewhat bullish posture. This much of a decline was not expected. Low milk prices are having an impact with high heifer prices limiting the maintenance of cow numbers. This much of a decrease in cow numbers is reminiscent of fall 2021 when cow numbers fell similarly, which eventually led to record-high milk prices the following year. Milk production per cow was down 7 pounds in January, the largest decline that has been seen in a long time. This may impact spot trading as buyers may look ahead and want to purchase supply early rather than later as supplies could tighten if this pattern continues. Annual milk production is slightly below 2022 and the first time it has decreased below the previous year since 2009.
CHEESE:
Cheese did not show anything to get excited about during spot trading Wednesday. That may or may not change Thursday as market participants assess the market for the longer term. Buyers may become more active as they look ahead to a potentially tightening market.
BUTTER:
Price may be more reactive to the potential for lower milk production moving through the year. Butter can be frozen until it is needed for demand without changing the consistency. The desire to build inventory might increase due to the decline of milk production. USDA will release the January Cold Storage report on Friday.
