OPENING CALLS:
| Class III Milk Futures: | 4 to 10 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | 5 to 8 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | Mixed |
MILK:
Milk futures tried to make a run higher early Monday is anticipation of further gains of cheese and butter. However, barrels showed weakness and butter falling back below $2.00, dealt a blow to expectations. The bearish implications for the cheese market due to the increase of American cheese stocks may have a bearish influence on futures prior to spot trading as traders remember what happened after the September Cold Storage report. Milk production had again declined during October reducing milk supply compared to the previous year, but American cheese inventory continued to increase. The current lower trend for milk production looks as if it will continue based on the previous three months. Increasing feed prices and other costs for producing milk will have an impact on milk production.
CHEESE:
Traders will remain cautious prior to spot trading. It had been another bullish Milk Production report but another bearish Cold Storage report. Traders will be looking over their shoulders remembering what happened after the September Cold Storage report. The strong increase of cheese prices last week could have set up a similar scenario as last time with a potential void under the market.
BUTTER:
Cold storage was friendly to the market with a large decline of inventory in October moving supplies down 13% from September and 6% below a year ago. This should be supportive to the market, but it may not push price much higher in the near term.
