Opening Calls:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Steady to 1 Higher |
Outside Market Opening Calls:
| Corn Futures: | 2 to 4 Lower |
| Soybean Futures: | 8 to 12 Lower |
| Soybean Meal Futures: | $2 to $4 Lower |
| Wheat Futures: | 4 to 7 Lower |
Milk:
Class III futures are not extending the strength from Monday. Futures over corrected themselves compared to the movement of underlying cash. Short-covering was triggered with the increase in cheese prices in addition to the idea that maybe further buying from USDA of dairy products could be forthcoming. In reality, this may have just been the course of normal purchasing for food programs as the government does throughout the year. This was not a new government program, but just an announcement of purchases. That did not affect the market as milk futures were mixed to lower prior to spot trading. The volatility of the market this year has had traders on edge and ready to jump in or out of the market on anything that might change the market. Continued strong exports are a definite factor that is needed to continue to provide underlying market support.
Cheese:
Cheese production is strong and filling the needs of the market. Retail sales have been good but are beginning to slow a little, according to the reports of some processors. This is seasonal and should already be factored into the market. The concern is that exports have also slowed for cheese as the higher prices of this past summer have trickled through the system. Cheese exports showed a decline of 12.8% in October. Declines may be seen for the next few months as international buyers reduced purchases due to high cheese prices during the summer. This may keep price strength to a minimum for a period of time.
Butter:
Butter continues to find some buying interest moving price in line with cheese. This is a good thing as it will balance the price spread between Class III and Class IV milk and eliminate the large negative PPD's we have been dealing with since June. Exports have been good in October and retail demand has been strong, but inventory remains significantly higher than last year.
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