OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Higher |
| Soybean Futures: | 3 to 5 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 6 to 10 Higher |
MILK:
Milk futures received a shot in the arm Thursday with all categories of underlying cash showing gains. Class III futures were a bit overdone to the upside, but somewhat higher prices were warranted. Overnight Class III futures are showing a correction as prices need to move closing in line with cash. Strong prices yesterday also provided a nice opportunity to establish good levels of price protection. The trend has been set with lower milk production due to increased culling of cows and lower output per cow. That may continue for a few months, but higher milk prices will eventually result in increased milk production. A strong increase of Class IV futures keeps Class III and IV prices in line with each other, improving the potential of higher pay prices.
CHEESE:
Block cheese prices has yet to break out of the sideways trading range while barrels may be leading the way higher. USDA will release the September Cold Storage report Friday, which will provide some direction. Inventory of American cheese is expected to show a decrease but continues to remain above year earlier levels.
BUTTER:
Increasing demand is expected to have reduced inventory significantly last month but there is still sufficient supply to supplement fresh production and meet demand. Higher cream prices keep many manufacturers relying on their own supply rather than purchasing extra from the spot market. This is limiting overall production.
