OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 4 to 7 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 4 to 6 Higher |
MILK:
Class IV milk futures came to life Wednesday due to the recent increase of butter and continued strength in nonfat dry milk. Class IV futures have increased about $1.00 since the end of September with some contracts up nearly $2.00 since the low in late July. A large part of the move has been due to the strength of nonfat dry milk. Class III prices have been increasing as well following similar price gains due to the strength of dry whey price. This has certainly improved the outlook for milk prices through the end of the year. Trading activity might be slow prior to spot trading Thursday as underlying cash will determine whether strength will continue.
CHEESE:
Cheese prices may be at a crossroad. If buyers continue to hold back during spot trading, Class III futures may be impacted negatively. Recent weakness could be viewed as a buying opportunity as demand continues to improve seasonally.
BUTTER:
The increase of butter over the past two days pushed price above butter. Historically, butter is generally higher than cheese and many times had been the leader of price direction. That pattern has not held true recently as butter and cheese has not been as connected as it once was. The strength of the complex has been nonfat dry milk and that does not seem to be changing anytime soon.
