OPENING CALLS:
| Class III Milk Futures: | 4 to 10 Higher |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 3 to 4 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 9 to 11 Higher |
MILK:
The decline in block cheese prices was significant and could result in lower prices Friday as buyers hold back to see how aggressive sellers will be. Support seems to have come from USDA's announcement of the purchase of dairy products for food banks, but higher milk production and increased output of cheese and butter may limit the impact. The USDA will release the January Agricultural Prices report Friday afternoon. It will contain most of the prices used in calculating income over feed for the Dairy Margin Coverage program. The soybean meal price is not part of this calculation and is released by the FSA on the following day. A significant payment is expected if the $9.50 level was chosen.
CHEESE:
The decline of block cheese on Thursday was not unexpected. However, the magnitude of the decline was unexpected. This weakness may cause buyers to hold back Friday as they wait to see how aggressive sellers will be. Sufficient cheese supplies and increased production may limit the upside price potential if the price rebounds.
BUTTER:
The butter price has the potential to post further gains. Lower inventory than a year ago and increased retail demand may absorb strong butter output. Exports in November were 227.0 percent above those in November 2024, with year-to-date exports up 157.0 percent above the same period in 2024. Strong butter production due to abundant cream supplies is being absorbed.
