OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 1 Higher |
| Soybean Futures: | 1 to 2 Lower |
| Soybean Meal Futures: | Steady to 1 Lower |
| Wheat Futures: | 1 to 2 Higher |
MILK:
The January and March Class III contracts closed at $20.30 and $20.00 respectively. The February contract was not far behind, closing at $19.97. That may be the level at which futures may hold if underlying cash prices remain choppy. There has been a steady increase in cheese prices recently, but it is not tied to a tighter supply or a surge in demand. Some of the buying resulted from increasing demand for fresh cheese, while some resulted from fear buying due to increasing prices. Milk supply is sufficient, but tighter than usual for this time of year spot milk prices still hold a premium to class in some areas. It certainly looks like the farm bill will be extended another year if economic assistance is also provided for farmers.
CHEESE:
Cheese prices have been increasing recently, but strength may be limited. There has been an increase in demand for fresh cheese, but it is expected to be temporary. Once the current buying interest is satisfied, it will settle down to regular demand. Cheese plants are running on full schedules with sufficient milk available. Buyers may not remain aggressive through the end of the year.
BUTTER:
The butter price is expected to remain choppy and likely to move to a new low before the end of the year. Buyers are confident about the supply and may remain less aggressive as demand generally slows after the holidays. Higher inventory will limit the upside price potential.
