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: | 3 to 5 Higher |
| Soybean Futures: | 2 to 4 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 3 to 6 Higher |
MILK:
Class III futures have exhibited some good strength over the past few days while Class IV futures have been trending higher over the past more than a month. Traders may be becoming friendlier to the market as they have seen culling increase and milk production slowing relative to the gains of earlier this year. However, cheese prices need to break out of the sideways trading range they have been in much of this year before milk prices will trend higher. Butter will need to resume the uptrend to support Class IV prices. However, there remains concern over the inability of prices to move higher during this time of year when demand is increasing. That may not bode well for the end of the year and early next year. USDA will announce the September Federal Order class prices Wednesday.
CHEESE:
Stronger buying interest for cheese may continue Wednesday with buying hopefully continuing for a longer duration. It has been positive that the spot market complex has all been moving in the same direction so far this week. For quite some time there had been one category or another that showed weakness for a period of time, hindering the increase in milk futures.
BUTTER:
Retail demand for butter has been improving, which should provide price support. Inventory is now running below year earlier levels. However, price has not yet been able to regain the recent price decline to turn the trend higher. Grade A nonfat dry milk is in a better position to move higher, providing support to Class IV futures.
