Opening Calls:
| Class III Milk Futures: | Steady to 10 Lower |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
Outside Market Opening Calls:
| Corn Futures: | Mixed |
| Soybean Futures: | 2 to 5 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 1 to 4 Lower |
Milk:
November was the second highest Class III milk price of the year. Even though there will be large negative PPD's, the overall pay price still will not be bad. It does hurt to see how much money was given up as a producer due to the Federal Order pricing mechanism. That may be mostly in the past now, according to current milk futures. The blend price will be much more average if the Class III and Class IV remain closer together. Of course, there are other factors involved, but the price spread between Class III and IV is a good indicator. USDA will release the October Dairy Products report Thursday indicating the level of dairy product production for the month. The report is not a market mover, but there will be no prices released Thursday for the Dairy Revenue Protection insurance program because of this report.
Cheese:
Cheese production is expected to show an increase on the Dairy Products report for the month of October. Milk production has been increasing remaining stronger than a year ago. More milk was, and still is, available to manufacturing than last year. Cheese movement has been strong, keeping inventory from building. However, there are a few reports indicating a little slowing of demand as the large demand for the holidays has now been filled. Buyers will purchase as fill-in orders continue to come in. It is also noted that some orders are being place for the first quarter of next year.
Butter:
Traders still remain cautious over the recent increase of butter price. Government buying is mostly finished for the time being. Retail demand is strong and reducing inventory on a month-to-month basis. However, inventory continues to build relative to the previous year. Nonfat dry milk futures do not indicate much upside potential for price during the course of the year.
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