OPENING CALLS:
| Class III Milk Futures: | Steady to 5 higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Lower |
| Soybean Futures: | 11 to 14 Lower |
| Soybean Meal Futures: | $1 to $3 Lower |
| Wheat Futures: | Mixed |
MILK:
Both Class III and Class IV futures continue to increase as underlying cash remains strong. The strength at this time of year is not unheard of but unusual. There is sufficient milk supply to satisfy both bottling and manufacturing, but the market is concerned over ongoing supply next year. If the trend of culling continues, milk supply could tighten. That could reduce the availability of milk for bottling and manufacturing resulting higher prices. The market will increase prices to the level at which producers will hold onto cows and add cows. That level has not yet been reached as seen on the milk production report. However, the livestock slaughter report last week indicated culling was slowing. The proof will be if milk production begins to increase over the level of the previous year. USDA will release the November Agricultural Prices report Thursday afternoon, providing prices used in the calculation of income over feed for the Dairy Margin Coverage program.
CHEESE:
The strength of cheese prices Wednesday with the rebound of barrels, increases the probability of higher prices again Thursday. Buyers remain aggressive and want to purchase available cheese for rebuilding ageing programs as well to satisfy current demand and prepare for potential demand in the first quarter of next year.
BUTTER:
Butter has strong support with buyers intent on purchasing what becomes available on the spot market at whatever the cost. Increased cream supply and higher churning activity will not change this anytime soon as manufacturing plants are holding some supply for later demand. Inventory has not yet been able to rebuild.
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