OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 2 to 5 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | Mixed |
MILK:
It will be an interesting beginning to the week due to the strength experienced last week even though underlying cheese prices were steady to lower. Traders have turned bullish with the anticipation of reduced milk production as time progresses. High feed prices and low milk prices have resulting in heavier culling and decreasing milk production per cow. This trend may not change in the near-term, but higher milk prices may slow the rate of culling. Cows from farms that are discontinuing the business may shift over to farms that now have room and believe milk prices may rebound. The dairy industry is more reactive than it has been in the past. A trend usually took an extended period of time to change, but the time of change has been reduced over the past few years as the industry has become more reactive to supply and demand. Trading is expected to be slow with price movement mixed until spot trading provides direction.
CHEESE:
Block cheese price still has not been able to break out of the sideway trading range it has been in much of the year. Time may be running out for a breakout and a trend higher before the end of the year. Once holiday demand is finished, it may be difficult for price to move higher unless milk supply tightens reducing the supply of milk for cheese production.
BUTTER:
It seems as if butter price would like to increase and move back to the $1.90 level, but current fundamentals may not allow that to happen anytime soon. Inventory is declining due to increasing retail demand with exports increasing substantially. Yet, it has not been enough to provide the necessary support to move price to that level or higher.
