Tuesday Morning Dairy Market Update - Mixed Trading Activity Expected Prior to Cash

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:	3 to 5 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	2 to 4 Lower

MILK:

Milk futures may drift ahead of spot trading as traders wait for direction. The World Agricultural Supply and Demand (WASDE) report will be released Tuesday, providing USDA's estimates of milk production, milk prices and dairy product prices for this year. The report is not a market-mover but is more for informational purposes. They revise these estimates monthly. The greater impact could come from the revisions they make for grains, as that will impact feed prices.

CHEESE:

Cheese prices have yet to find a bottom. The prices certainly are low enough to generate increased demand and buying interest. However, buyers on the spot market are uncertain about demand. Overall demand has been lower than a year ago and there remains concern over the impact of tariffs. This has kept buyers from being aggressive, and they may hold until spring flush or early summer before purchasing for demand later in the year.

BUTTER:

The butter price has been holding, but it is uncertain whether it will hold. There remains sufficient supply for demand and cream supplies remain heavy. International demand has been strong with January butter fat exports up 145% over January 2024. The U.S. price is very competitive on the world market.