OPENING CALLS:
| Class III Milk Futures: | 5 to 15 Lower |
| Class IV Milk Futures: | 8 to 10 Lower |
| Butter Futures: | 2 to 3 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 4 to 5 Lower |
| Soybean Meal Futures: | $0.50 to $1.00 Lower |
| Wheat Futures: | Mixed |
MILK:
Hopefully, milk futures will retain the gains from higher underlying cash prices. However, the weakness of butter, nonfat dry milk, and dry whey may indicate the market may have reached a threshold. The key will be the demand that would maintain current price levels. The milk production report showed strong milk production for January, which is expected to continue as the year progresses. It will not be too long before milk production increases seasonally as spring flush unfolds. Increased processing capacity will handle the extra milk without difficulty. The hope will be that demand will keep up and milk prices will be supported. Due to USDA's Cold Storage report, no Dairy Revenue Protection prices will be released Tuesday.
CHEESE:
The block cheese price remained resilient Monday. The initial price decline was short-lived as buyers wanted ownership of cheese and bid up for it. Cheese prices are historically low, and buyers seem interested in purchasing as a hedge against higher prices in case they develop. Demand for cheese is good, but there is little concern over sufficient supplies of cheese due to strong milk production.
BUTTER:
The weakness of butter on Monday may indicate a price threshold has been reached. Buyers have been aggressive and have purchased quite a bit of butter over the past few weeks. They may have filled their needs and may now step back. The sellers may now step up more aggressively to take advantage of the higher price. The January Cold Storage report will be released Tuesday, and the level of inventory will indicate the strength of demand for the month.
