OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 2 to 5 Higher |
MILK:
One can only wonder what might be in store this week due to the large decline of closer Class III milk futures. The first thought might be the market may be overdone to the downside as prices have fallen substantially. However, there seems to be little reason buyers of cheese will be aggressive as long as supplies are sufficient. The large push for holiday buying may be over with purchasing moving to an as-needed basis through the end of the year. Class III milk prices may have limited upside potential, but that does not mean higher prices will not take place. Prices will always fluctuate as traders will move the market based on perception and underlying cash price fluctuations. Class IV prices continue to increase, widening the gap to Class III. Butter and nonfat dry milk prices remain strong. Weather has been good for milk production with many farmers wrapping up harvest for the season. It looks like there will be sufficient grain, but prices will remain higher, continuing to squeeze profitability.
CHEESE:
Spot trading at the end of last week suggests there is a potential for barrels to be near a bottom. Thursday and Friday showed more spot trading activity develop as price has declined to the level to generate strong buyer interest. Blocks may not be in the same posture as activity remains light and sellers active.
BUTTER:
Price remains poised to move back up toward $2.00. However, it could follow a similar pattern as cheese if holiday orders have already been placed and filled early. Buyers have been active and may have sufficient supplies on hand. However, international demand remains strong for both butter and powder, which should continue to provide support.
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