OPENING CALLS:
| Class III Milk Futures: | 3 to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Miuxed |
| Soybean Futures: | 3 to 4 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 3 to 4 Higher |
MILK:
Traders viewed Thursday's weakness in block cheese negatively. This triggered aggressive selling in the nearby Class III futures contracts. The fear is lower prices will unfold as buyers may step back. The January Milk Production report will be released Friday. I estimate milk production to be 3.9% higher than a year ago. I estimate cow numbers to be nearly the same as in November. The Make America More Ground Beef (MAMGB), is an initiative designed to help dairy farmers monetize surplus dairy-origin cattle, increase domestic beef supply, and lower grocery prices for beef. Western United Dairies is promoting this idea. It is not a mandate but a voluntary program open to all U.S. dairy operations, potentially launching as early as this spring. Western United Dairies shares that the MAMGB program aims to divert 800,000 to 1 million additional dairy-origin cattle to slaughter in spring 2026, injecting an estimated 900 million to 1.1 billion pounds of lean trim into the ground beef market. They claim it will lower retail ground beef prices by 18% to 25%, and also increase beef demand due to the lower prices. The greater number of dairy cows moving to slaughter may support dairy prices and possibly tighten the milk supply.
CHEESE:
The weakness in the block cheese price may move buyers to the sidelines for a time as they wait to see how aggressive the sellers might be. There is a sufficient supply of cheese available for demand. This may leave the market with limited upside potential.
BUTTER:
The butter price remained steady for the day, but the increase in the nonfat dry milk price supported Class IV futures. The November Cold Storage report will be released Friday and may show butter supplies have been building.
