OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 3 Lower |
| Soybean Futures: | 7 to 9 Lower |
| Soybean Meal Futures: | $2 to $4 Lower |
| Wheat Futures: | 3 to 5 Lower |
MILK:
The bullish implications of the September Milk Production report may push milk futures higher. Milk production only being 0.2% above the previous year with production per cow and cow numbers declining, provides a friendlier price outlook. Obviously, higher prices will need to be supported with higher cash markets. The contraction of milk production due to significantly higher culling may point to the potential of a tighter milk supply. A continuation of this trend may have some processing plants and co-ops rethink their milk production quotas that are in place or planned to be implemented. Feed prices are high as well as other expenses squeezing profit margins. USDA will release the September Livestock Slaughter report that will show a significant increase of dairy cattle slaughter.
CHEESE:
It will be interesting to see whether cheese buyers might be more aggressive during spot trading Thursday as they see milk production slowing. This may not have much impact on underlying cash as there is sufficient supply available to the market. USDA will release the monthly Cold Storage report Friday, which should show a decrease of inventory but supply continuing to remain higher than a year ago.
BUTTER:
The market is uncertain as to the level of demand through the rest of the year. Retail orders are increasing as buyers want to provide sufficient lead time to receive supply due to transportation issue that are evident. Export demand remains robust, but price has not been able to break out and trend higher.
