OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 2 to 6 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 1 to 2 Lower |
| Soybean Meal Futures: | Steady to $1 Higher |
| Wheat Futures: | 2 to 3 Lower |
MILK:
Class III milk futures rebounded a little at the end of last week, but the overnight trade does not suggest it will continue. The underlying cash market may remain choppy, which will limit the upside potential for prices. There is little fundamental reason for prices to trend higher. The USDA will release the December milk production report on Friday, which is expected to show continued strong milk production. The current cold weather being experienced in many areas may have some impact on production and milk movement, but the impact will be minimal and is not expected to change anything in the market. Traders will continue to initiate short-term positions in an attempt to scalp the market for minor profit.
CHEESE:
Cheese production is strong, with supplies for most types of cheeses readily available. There is concern that the block cheese price will revisit the low of $1.2825 and could fall below that level through the first quarter of the year. Buyers remain unaggressive, seeing no reason to be aggressive as inventory is expected to build.
BUTTER:
The price had a nice rebound last week, but the strength is not expected to continue. Buyers have been able to purchase a significant volume of butter on the spot market, which may make them less aggressive buyers in the future, as their inventory will be sufficient for demand. The upside price potential is expected to be limited.
