OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Higher |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 2 Higher |
| Soybean Futures: | 5 to 9 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 2 to 4 Higher |
MILK:
The summer is over, and schools are back in session in all areas. Fluid milk demand should be higher and more stable this year compared to last year. This combined with increasing demand should provide some support to underlying cash prices and milk prices. However, cheese prices and futures prices have yet to develop an uptrend. Class IV futures are not following the same pattern but have been trending higher due to the strength of butter and nonfat dry milk. Futures have increased around 75 cents over the past two weeks. Lower amounts of milk moving to manufacturing may provide additional support as seasonal demand begins to improve.
CHEESE:
The block/barrel spread continues to remain extremely wide as they both run on their own fundamentals and not the traditional idea that this wide spread will not be maintained will need to converge. Blocks have been holding in a sideways pattern while barrels have been in a downtrend. There is little fundamental reason to prices to change in the near-term.
BUTTER:
Price is trending higher and providing nice support to Class IV futures. Class IV futures are running very similar to Class III futures. This has not happened for quite some time. Butter may be indicating where the entire market may eventually move. The time of year is right for increasing demand, which may continue to provide support.
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