OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Higher |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 8 to 12 Higher |
| Soybean Meal Futures: | Steady to $1 Higher |
| Wheat Futures: | 2 to 4 Higher |
MILK:
There is strong support under milk futures as trader psychology has changed. Even though barrel cheese price declined Thursday, Class III futures still increased. The change in attitude is welcomed, but ultimately it will need to be supported by underlying cash. Class III milk futures have seen surprising strength even though cheese prices have not broken out of the sideways pattern to trend higher. Much of the strength has come from a strong dry whey market with price pushing steadily higher over the past month. Class IV futures have also been increasing due to the strength of nonfat dry milk. The outlook though the end of the year in improving, but the industry continues to be cautious over the duration of strength.
CHEESE:
Cheese inventory is large, yet prices have been holding well. Some of this may be due to ongoing issues with transportation. There are delays in moving product to the end user in some instances, which has created the perception of a tighter supply. There are also labor shortages. This raises prices and increases demand as more order flow in to compensate the supply chain tightness. Consumers then become concerned and have the tendency to purchase more than usual in order to have product on hand. Traders do not share that same idea as cheese futures do not show any optimism over cheese prices as futures show lower prices next year than current cash.
BUTTER:
Butter has lower inventory than a year ago, but that has not been able to support price. Reduced production in August was not able to support price. Buyers continue to obtain sufficient supply from the spot market without having to bid up for it.
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