OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 1 to 9 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 1 to 3 Higher |
MILK:
Class III milk futures may be carving out a large trading range with volatility in the underlying cash continuing. The negative reaction to the implementation of tariffs on Mexico and Canada was strong as both countries are significant importers of dairy products. It certainly was positive that these tariffs were put on hold, but the possibility is still there. If the tariffs had gone into effect, Canada planned to include dairy products in retaliatory tariffs. This could have an impact on demand as exports could slow. Canada is the largest buyer of butterfat. This uncertainty will keep traders cautious.
CHEESE:
According to the dairy products report, the lower production of American cheese continued in December. Inventory remains below a year ago, which is positive in the current market environment. The inventory of cheese began to increase in December and generally increases during the first half of the year. The hope is that demand improves.
BUTTER:
The butter price has yet to find a bottom. Buyers see no need to be aggressive as the butter supply is plentiful and production is strong. The inventory will naturally increase as it generally does through the first half of the year. Record butterfat levels in the milk is keeping the cream supply plentiful.
