OPENING CALLS:
| Class III Milk Futures: | 5 to 12 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 2 to 3 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 4 to 6 Lower |
| Soybean Meal Futures: | $0.50 to $1 Higher |
| Wheat Futures: | 4 to 5 Lower |
MILK:
The anticipation is for higher underlying cash prices Monday. Class III milk futures are higher as traders anticipate cheese prices may move similarly to what they did a week ago -- when the butter price jumped. Cheese prices followed suit. This seems to be the expectation for Monday. The fundamentals have not changed much, but buyers in the spot market have turned more aggressive when they need to buy. Buyers seem to be comfortable with the supply of milk, but are becoming increasingly cautious over the potential of some announcement of a program that could tighten the milk supply. However, with expansion taking place and cow numbers increasing, it may be difficult to change the supply quickly or at all.
CHEESE:
There is sufficient cheese available in the market, which will limit the upside potential for prices. However, when buyers turn aggressive, it will bring greater buying interest into the market as others will step up in fear of having to purchase at higher prices. Even though this time of year generally sees slower demand, buyers will want to purchase at lower prices and may do so aggressively.
BUTTER:
The large increase in the butter price on Friday may see follow-through buying Monday. Overall demand is good and better than expected due to the decline of inventory in December and supplies ending the year 7.0% below the previous year.
