OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 2 Higher |
| Soybean Futures: | 6 to 10 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 5 to 8 Higher |
MILK:
Milk futures have had a nice run higher but may stall out as traders grapple with declining milk production but increasing inventory. Milk futures have been rising on strong dry whey, nonfat dry milk and steadily increasing barrel cheese price. However, butter and block cheese prices have been in a range. Traders have become bullish over the potential of tightening supplies through the end of the year. However, the Cold Storage report may suggest otherwise. Lower milk production still has not reduced supplies of cheese with time running out before the end of the year. Culling has been heavy, but the potential for higher milk prices may slow this to some extent. Futures are expected to see some selling pressure to begin the week.
CHEESE:
It is unusual to see cheese inventory increase in September, but it is not unheard of. There have been other years during which inventory increased during the higher demand period of the year. Demand has been improving and may draw down inventory significantly, but it looks as if inventory may end the year higher than the end of last year.
BUTTER:
Price continues to struggle, but it is showing a tendency to trend higher. Inventory is 4% percent below a year ago, indicating demand has been strong. Retail orders have been increasing as they are purchasing supplies ahead of their usual lead times in order to make sure they receive what they need due to some of the trucking issues that have been prevalent. So far, orders for food service have remained steady.
