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 Higher |
| Soybean Futures: | 7 to 10 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | Mixed |
MILK:
Higher prices for milk as being indicated by the gains of milk futures. It is difficult to say whether these prices will continue or if demand will slow and buyers turn less aggressive in the near-term. A recent article indicated that a milk shortage in Australia will increase price in their stores shortly. A senior analyst for Dairy Australia said demand for milk is growing across the world but that production was not keeping up. They are seeing milk supply tightening as a result of growing costs for dairy producers. Australia is also running out of a key fluid added to diesel fuel to keep trucks running. U.S. dairy farmers are seeing substantially higher prices for goods and services with more increases expected at the beginning of the year. Even with the potential for higher milk prices, this may limit growth in production.
CHEESE:
The weakness of barrel cheese Wednesday was a bit unexpected due to the aggressive buying we had been seeing. However, it was not unexpected considering the time of year. It will be interesting to see whether the weakness of barrels will pull blocks lower or if the strength of blocks will pull barrels higher. Time of year would favor some weakness developing in blocks, but it is difficult to tell.
BUTTER:
The rebound of butter Wednesday indicates that price is not ready to decrease even though retail and restaurant demand for the end of the year is supplied. Current buying interest is from buyers looking ahead to early next year. Nonfat dry milk continues to push higher on strong demand.
