OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 1 Lower |
| Soybean Futures: | 2 to 3 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 2 to 3 Lower |
MILK:
The time of year may make it difficult to find something to be bullish about in the milk market. Underlying cash cheese prices indicated at the beginning of the year that prices could be supported due to reduced milk production compared to the previous year and steady demand. That was short-lived as milk production increased seasonally, but demand did not. It is early in the year, and this may change in time, but the magnitude of the weakness in cheese prices and Class III futures over the past two weeks has traders grappling with price direction moving forward. A significant change in the market is not expected in the near term, but we cannot forget the impact of the recent volatility in the underlying cash market. The USDA will release the December Milk Production and Cold Storage reports on Friday afternoon.
CHEESE:
The rebound from the lows during spot trading on Wednesday did not provide support to Class III futures, but may indicate a bottom may have been reached in the cash market for now. However, limited cash activity does not provide a solid indication of the true market. We should continue to expect significant volatility in the cash market in the near term.
BUTTER:
The current weakness of the butter market may continue with the price possibly moving back to the lows in December. The decline on Wednesday moved the price to the lowest it has been this year. Strong churning activity keeps sufficient supply readily available to the market.
