OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | Steady to 2 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 4 to 5 Lower |
MILK:
There is a strong possibility block cheese price may retest the low set in December. This will continue to keep pressure on Class III milk futures. The early optimism was eliminated when further weakness was seen in underlying cash prices. Slowly improving milk production leaves sufficient supply for demand. Lower corn prices may keep pressure on the market as a historical correlation exists between corn and milk prices. The March contracts are priced and will adjust based on the weekly AMS prices, but will remain sideways in a tight range until the end of the contract.
CHEESE:
Lower cheese prices have been unable to uncover aggressive buyer interest. The supply of milk is increasing, while demand remains good but steady. Buyers have little concern over supply for the near term and are unwilling to purchase too far ahead and pay for storage. They have been buying on the way down, which may limit aggressive buying to fill orders for a time.
BUTTER:
Butter is in a good position and poised to move higher as demand remains steady and should improve over the next two weeks. However, gains may be limited as some butter has already been purchased to meet expected demand and contracted orders. Export demand may improve as the year progresses.
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