OPENING CALLS:
| Class III Milk Futures: | 4 to 6 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Lower |
| Soybean Futures: | 10 to 14 Lower |
| Soybean Meal Futures: | $4 to $5 Lower |
| Wheat Futures: | 3 to 5 Lower |
MILK:
The early anticipation of higher underlying cash prices for cheese and dry whey quickly dissipated when prices weakened during spot trading. Despite the weakness, the price outlook has turned more positive due to the recent price strength. Class IV futures were pushed higher from the increase of butter and nonfat dry milk. With further support from butter, new contract highs may continue to unfold. The increase in milk futures over the past few weeks has resulted in numerous articles suggesting the market has turned the corner and higher prices are ahead. Hopefully, this is correct, but caution needs to be exercised as underlying fundamentals do not suggest a continued trend higher at this time of year.
CHEESE:
Cheddar cheese showed a nice increase in the Global Dairy Trade auction Tuesday, indicating global demand may be improving. Dairy exports for December will be released soon, which may show cheese exports increased over the previous year. There are reports of retail demand improving with some of that due to the Super Bowl.
BUTTER:
Butter price is supported but not enough to push the price higher and continue the uptrend at this point. However, fundamentals might be improving with world demand increasing. The Global Dairy Trade auction showed the butter price up 10.3%. If export demand improves, butter prices will make another move higher.
