OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 4 to 6 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 8 to 10 Lower |
MILK:
Traders may be turning more cautious following the meteoric rise higher of milk futures recently. The realization of the $450 million in aid appropriated by the USDA for purchasing food has been digested with the realization that this is a longer-term event and encompasses more than just dairy. Cheese demand will need to remain strong through the end of the year or prices could set back somewhat. USDA finally came through with the signup for the Dairy Margin Coverage (DMC) program for 2022. Better late than never. The signup period will run from Dec. 13, 2021 to Feb. 18, 2022. There is also a supplemental DMC enrollment allowing producers to increase their milk production base if it remains under 5 million pounds. An updated feed cost formula for income over feed has also been announced using only the cost of premium hay rather the current blend of hay.
CHEESE:
The block/barrel price spread has been narrowing, but that does not necessarily indicate market direction. It does show that barrels are in more demand currently and in shorter supply resulting in buyers needing to come to the spot market to purchase supply. Blocks seem to be content at the current level.
BUTTER:
Price may be near a threshold but is not expected to fall back very much, if at all, through the end of the year. Holiday demand remains strong with buyers looking ahead to first quarter demand of next year. Inventory has been decreasing with sufficient supply to supplement fresh production to meet demand.
