OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Lower |
| Soybean Futures: | Steady to 2 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 8 to 12 Lower |
MILK:
Class III milk futures increased Monday despite the weakness of block cheese. That is a change in attitude as previously, weakness or ever a steady price in any category of cheese resulted in weakness of futures. However, the recent strength and in cheese as well as the time of year, might allow for greater support to develop. More contracts are moving closer to the $18.00 level as traders seem to have turned friendlier to the market. Fundamentals still do not necessarily suggest much upside price potential, but the possibility of a tightening milk supply is possible if the culling rate continues to exceed the levels of last year. Overnight trading activity points to higher futures Tuesday.
CHEESE:
The block/barrel spread moving close together has put some in the industry more at ease. However, the difference in prices does not seem to be as critical as it once was. Each category moves according to its own fundamentals eliminating the correlation that once was. Many plants Tuesday do not have the ability to switch production between blocks and barrels as they did in the past. They have become more specialized.
BUTTER:
Price has retraced over half of what it gained since the beginning of August. Reduced output and lower inventory in August compared to the previous month and the previous year has not been able to provide support to the market. Supply remains readily available with sellers wanting to move product rather than store it.
