There have been so many attempts to show this is a Cannanite myth, and whenever I've tried to track things down, it's never been verified. This is true in this case as well. In the entire Ugaritic corpus "kid/goat" and "milk" do not occur in the same stanza or poem. Here is the portion of the poem supposedly containing the description of a ritual in which a kid is seethed in his mother's milk:
Let me invoke the gra[cious] gods,
[ ] and beautiful,
sons of Shap[sh? ]
Let them give a feast [to those] of high rank,
in the wilderness of the end (of the world).
[ ] on their heads,
Eat from any of the food,
and drink from the vat any wine!
Greetings, king, greetings, queen, priests and temple-
The lord and master sat enthroned,
in his hand the staff of sterility,
in his hand the staff of widowhood.
Those who prune the vine pruned him,
those who bind the vine bound him;
they let his tendril fall like a vine.
Seven times shall it be recited on the throne-dais,
and the priests are to respond.
Now the steppe, the vast15 steppe
is the steppe of Athirat and Rahma<y>.
Over a fire seven times the choristers of fine voice
(seethe) coriander in milk,
mint in butter,
and over the cauldron seven times
let incense be burned.
Rahmay went forth,
[and Athirat] set out.
[ ] they girded themselves.
May the gracious chorister [ ]
and their name let the priest e[xalt.]
The dwellings of the gods eight [ ]
seven times [ ]
Lapis lazuli, carnelian
scarlet the singers…24
Let me invoke the gracious gods,
[both gluttonous from] birth26,
who suck at the nipples of Athirat’s breasts,
[from the paps of Rahmay,]
Shapsh counts their tendrils,
[ ] and grapes.
Peace to you, priests and temple-victuallers,
as you proceed to the sacrifice of propitiation.
Wyatt, N. (2002). Religious texts from Ugarit (2nd ed., pp. 325–329). London; New York: Sheffield Academic Press.
I apologize for the lengthy quotation, but the only way to squash these notions or at least show how dubious they are is to present the actual text.
For those of you with the logos package, you can buy the book and investigate yourselves, it's part of the Ugaritic language package, and I've searched through the entire databank looking for "goat", "kid", "milk" and have found nothing to support this notion, yet it keeps coming up. I can only surmise that the default explanation for anything in Leviticus is that it was being done by native tribes that the Israelites were commanded to be separate from. This, I believe, is poor exegetical practice.