OPENING CALLS:
| Class III Milk Futures: | 6 to 10 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 1 to 3 Lower |
| Soybean Meal Futures: | Steady to $1 Lower |
| Wheat Futures: | 1 to 3 Lower |
MILK:
Class III milk futures have retreated quite significantly from the highs set last week. It was not due to a retracement of underlying spot prices, but from the inventory levels of cheese for the month of September. Underlying strength is from the fact that milk production has been slowing and may continue to do so for a time. There are no indications feed prices will decline anytime soon and no indication other expenses will decline either. Farmers are doing what they can to limit expenses in order to remain profitable. This may impact milk output for a while. However, it may not have a large impact on milk prices as demand generally slows after the holidays, leaving less demand at the time of less supply, resulting in a somewhat balanced market.
CHEESE:
Cheese prices have moved to a level at which sellers may be more aggressive offering product to the market. Blocks have yet to break out of the range while barrels have been showing a nice uptrend. Prices historically peak in October or November this provides some caution to the market.
BUTTER:
Butter price may retest the highs from April but may have a difficult time holding or exceeding that level. Even though inventory is below a year ago, it is sufficient to supplement fresh production and meet demand. Production continues to run below a year ago, allowing for the decline of inventory.
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