OPENING CALLS:
| Class III Milk Futures: | 4 to 8 higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 5 to 7 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 1 to 2 Higher |
MILK:
Class III milk futures seemed to find some semblance of support in the $19.00 price range. However, that took a turn for the worse on Wednesday as traders threw in the towel after cheese prices declined. A cloud hanging over the market will continue to be whether tariffs will impact demand for dairy products from international buyers. The countries of Mexico, Canada and China account for 40% of our dairy exports. The uncertainty will keep cheese buyers cautious as they are uncertain of demand as the year progresses. The USDA will release the January Milk Production on Friday, which is expected to show milk output remaining below a year ago.
CHEESE:
Cheese demand is good and improving in some cases and for some varieties. But overall, demand remains below a year ago. Demand is generally slower during this time of year with little idea of changing in the near term. Buyers do not want to build inventory with demand uncertainty. The weakness of dry whey added to the bearishness.
BUTTER:
A second consecutive gain in the spot butter price was insufficient to generate buying interest in Class IV futures. Much of the gain was offset by the decline of nonfat dry milk. Further upside price potential is expected to be limited.
