Opening Calls:
| Class III Milk Futures: | Steady to 5 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
Outside Market Opening Calls:
| Corn Futures: | 4 to 6 Higher |
| Soybean Futures: | 10 to 15 Higher |
| Soybean Meal Futures: | $3 to $4 Higher |
| Wheat Futures: | 3 to 6 Higher |
Milk:
Milk futures made a nice bounce on Friday in response to higher cheese prices. The market did not show any real follow-through overnight as traders wonder if price support has been uncovered or if the increase of prices will just be temporary. It is a short trading week for dairy with trading taking place Monday through Wednesday. Most markets will be close on Thursday for Thanksgiving. The dairy complex will be closed on Friday even though all other markets will be open for a shorter day. This should not have any real impact on the market as cash business will need to be done and a shorter trading week will have no influence on this. Class III futures from December through the whole of next year shows a more normal market. Class IV futures continue to show strength through the year. That will likely change substantially as we move through next year. The impact of COVID-19 and rising milk production will be felt for a good portion of the year.
Cheese:
The bounce of cheese prices Friday was certainly good to see. The duration of this bounce is unclear. Buyers of cheese have stepped back not specifically because sellers were aggressive, but also because demand has slowed due to much of the holiday purchases having been completed. Strong demand remains as buyers continue to purchase on an as-needed basis. Aging programs may begin to be replenished at these lower prices.
Butter:
It appears butter prices might be heading lower. Other than the large price increase from late April to June, the market has been grinding lower since July 2019. COVID-19 created a period of substantial volatility, but it did not change the trend that began last year. Further weakness might be seen as more restrictions are being put on public gatherings with some places of business being shut down again for a few weeks. This does not provide any support for increased demand. USDA will release the October Cold Storage report Monday. Inventory is expected to show a decline, but that decline of butter might be less than usual for this time of year.
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