OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 3 to 5 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | Mixed |
MILK:
Milk futures remain in a downtrend with the February Class III contract falling below $15.00 on Tuesday. The January contract is basically priced and will show limited price movement before the Federal Order prices are announced. Subsequent contracts may decrease if the underlying cash prices continue to flounder. Milk production is expected to remain strong. This will keep a sufficient supply of milk available for bottling and manufacturing. There is little indication of this trend changing anytime soon. The minor strength in the overnight milk futures is likely short-covering taking place after the recent weakness, as traders take some profits off the table if they have been realized.
CHEESE:
The minor increase in the block cheese price Tuesday is meaningless, as plentiful supplies will limit the upside price potential. There is a possibility of cheese prices showing further weakness. Higher cheese production will keep plants moving supplies to the market, limiting the increase in inventory at the plant level.
BUTTER:
The butter price has held steady for two days, but this is little reason to indicate the price will trend higher any time soon. Inventory is expected to move above a year ago as butter production remains strong and outpaces demand.
