OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 5 Lower |
| Soybean Futures: | 3 to 5 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 4 to 6 Lower |
MILK:
Class III milk futures made a bounce up last week, but then ran out of steam even though cheese prices were higher for the week. Traders remain uncertain as to the duration of stronger prices. Rather than anticipate a seasonal increase of prices, traders are waiting to see if it is necessary to put premium in the market. It is possible milk futures may remain very close to underlying cash throughout the rest of the year. Class IV futures are painting a different picture as the strength of nonfat dry milk and butter keep prices slowly trending higher. This puts Class IV prices very much in line with Class III prices. Trading activity will be slow to develop until some direction is seen from cash.
CHEESE:
Cheese demand is improving and utilizing fresh production as well as inventory. The overall price trend in blocks has been increasing since early June but has still not been able to break out of the upper end of the range it has been in for much of the year. Seasonal demand could push this higher, but gains could be limited based on increased milk production.
BUTTER:
Demand is improving, which has been utilizing current production as well as reducing inventory. Traders believe there may be limited upside as butter futures show little price gains though the next year. Spot price is still trending higher but will need to find further support soon or a sideways range could develop.
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