OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 7 to 9 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 3 to 5 Higher |
MILK:
Class III milk futures are holding gains while Class IV futures continue to increase. The steady improvement of Class IV futures is garnering more attention by the trade as many contract months are now above Class III futures. Unfortunately, this will move any adjustment to the current pricing system to the back burner as it will not be a concern. This will be similar to the indication of an adjustment to the formula for income over feed that was announced a few months ago and has not had any change since that announcement. But it is good to see both classes of milk running in tandem again after the aberration that was seen for over a year. USDA will release the September Milk Production report Wednesday afternoon. I estimate milk production to be up one percent over a year ago with cow numbers down 5,000 head from last month.
CHEESE:
Barrel cheese price moved above the high of Oct. 5 and has now moved back to the highest level since May 5. The question is whether the market is strong enough to resume the trend higher. Blocks continue to lag and remain in a range, which may be detrimental to continued strength of barrels.
BUTTER:
Price continues to remain choppy having difficulty maintaining strength. The positive aspect is that price has been holding at a higher level and that there is a good amount of business being done during daily spot trading. Inventory is expected to show a decline for the month of September.
