OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | Mixed |
MILK:
Nearby Class III futures contracts just cannot find support as underlying cheese prices struggle. Even the strong increase of cheddar cheese on the Global Dairy Trade auction did not turn the head of traders for the near term. There is sufficient milk supply for bottling and manufacturing, allowing orders to be filled. There has been the idea that dairy demand will increase significantly over the holidays as more get togethers will take place, making up for last year when that was kept to a minimum. However, there seemed to be many more gatherings all summer, yet demand was not enough to move price much higher. The gains that we have seen have been nice, but not as much as hoped, leaving farms struggling with a higher cost of production. USDA will release the October Federal order class price Wednesday with the trade estimating a Class III price of $17.84 and a Class IV price of $17.05.
CHEESE:
The bright spot is that block cheese price held the past two days despite the decline of barrel cheese. This moved barrel price below blocks where it had not been for a few weeks. Blocks above barrels does not make the market any stronger, it just reflects the current fundamentals of each category. It about two weeks, blocks will have remained in a sideways pattern for an unprecedented duration of a year.
BUTTER:
Price is poised to reach $2.00, which seemed out of reach a few weeks ago. Butter demand has been improving both domestically and internationally. Orders are being placed early to ensure supply will be available for holiday demand. The uncertainty of trucking and deliver schedules is pushing earlier ordering. Cream prices are higher, leaving some plants less willing to purchase cream off the spot market. They would rather reduce production schedules than increase their cost of production and risk a seasonal decline of butter price that has been produced at a higher cost.
