Tuesday Morning Dairy Market Update - Slow Dairy Trading Activity is Expected

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	2 to 3 Lower
Soybean Meal Futures:	Mixed
Wheat Futures:	4 to 6 Lower

MILK:

Trading activity is expected to be similar to last week. Light trading activity might be the pattern unless there is a substantial change in underlying cash. The time of year would not suggest any large changes in fundamentals. Milk production is holding steady with sufficient milk for demand. It will not be too long before winter weather turns milder, and spring flush begins. However, that will not be for a few weeks with record-cold temperatures in many areas of the country. Traders will focus on the dry whey and nonfat dry milk prices. Further weakness is expected, but the extent of it is unknown and it will have a substantial impact on the market.

CHEESE:

Cheese prices are expected to remain choppy, buyers are not aggressive and sellers want to move supply. The market seems to be balanced for now. Some cheese plants would like to purchase more milk off the spot market, but are having difficulty finding it. This will limit inventory growth.

BUTTER:

The butter price is expected to see further weakness as strong churning schedules leave plentiful supply to the market. The abundant cream supply is expected to continue for weeks to come. This will limit upside price potential.