OPENING CALLS:
| Class III Milk Futures: | 4 to 10 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 3 to 5 Higher |
| Soybean Meal Futures: | $3 to $4 Higher |
| Wheat Futures: | 2 to 3 Higher |
MILK:
Class III milk futures have performed well over the past few weeks, supported by the strength of cheese prices. This improves the price outlook for the upcoming year unless demand slows more than usual. Milk production is strong but not as strong as in previous years. Heifer prices continue to increase and are limiting expansions. Milk production per cow declined substantially in November but is expected to have recovered somewhat in December. The continued impact of bird flu remains a concern for the industry. Most processors indicate they have a sufficient milk supply and are not concerned. Current spot milk prices are as much as $8.00 below class. That will change over the next few weeks as schools will be back in session and demand will return to the pre-holiday normal. Today is the last day to trade December futures and options, with the Federal Order prices to be announced on Thursday. USDA will release the November Agricultural Prices report this afternoon.
CHEESE:
Cheese prices could see further gains today as the price increases seem to be bringing more buyers into the market. The buyers want to take advantage of the lower prices and are bidding aggressively. However, trading volume has been light limiting the amount of cheese that they have been able to purchase at lower prices. There may be a void developing under the market as the current fundamentals do not suggest supplies will tighten.
BUTTER:
The butter price is expected to drift for a period as holiday demand is over and buying for the first quarter has been ongoing. Butter production has been disrupted over the past week resulting in heavy cream supplies being available to the market. Butter supplies at the end of the year will be similar to those from a year ago and will be supportive of the market.
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