Friday Morning Dairy Market Update - January Milk Production Report Will Be Released

OPENING CALLS:

Class III Milk Futures:	4 to 8 Lower
Class IV Milk Futures:	3 to 6 Lower
Butter Futures:	Steady to 1 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	Mixed
Soybean Meal Futures:	Steady to $1 Lower
Wheat Futures:	3 to 4 Higher

MILK:

Class III futures showed minor gains despite the weakness of the barrel cheese price. Futures were overdone to the downside on Wednesday, already having the weakness factored in. The USDA will release the January Milk Production report Friday afternoon. Milk production is expected to remain below a year ago. Cow numbers are estimated to be about even with the previous month. Milk production in California will be the subject of interest due to the significant impact of bird flu on dairy farms. Traders will be cautious ahead of spot trading as prices remain weak.

CHEESE:

The barrel cheese price is trending lower. Barrel cheese supplies are more available than blocks for the time being. Overall cheese production is holding, but American cheese output continues to run below a year ago. There has been a greater emphasis on the Italian type and other cheese varieties that have been increasing in demand.

BUTTER:

The butter prices may see further weakness as buyers may step back from the market again to let the price decline. There have been 33 loads of butter traded over the past three days. The concern is the weakness of Grade A nonfat dry milk. The price has declined to the lowest level since Aug. 15, 2024. The price has fallen by 15.50 cents from its peak in November.