OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 5 Higher |
| Soybean Futures: | 5 to 8 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 5 to 10 Higher |
MILK:
Traders will remain cautious with a bias to the upside. The strength of barrels Tuesday did not trigger aggressive buying of Class III futures as it may not be a real indication of the strength of the market. Buyers need to step up and be more aggressive as they need to fill orders for the holidays. Once filled, the market may slip back again. The market does not seem to be influenced by the other commodity and financial market volatility. Milk supply is sufficient to meet demand but continued heavy culling of cows and lower production per cow may eventually tighten the market. The offsetting aspect to this would be a period of slower demand that generally exists after the holidays. Futures are expected to chop around as traders sort out supply and demand. USDA will release the November Federal Order prices Wednesday with the trade anticipating a Class III price of $18.04 and a Class IV price of $18.70.
CHEESE:
At least the block/barrels spread moved closer together Tuesday. Block trading was a bit weird with an initial offer posted and then lowered, followed by the offer then being cancelled after finding no buyers. A later offer was then placed at the unchanged price. This action left traders a bit more cautious, even though barrel prices increased significantly. It will be interesting to see whether the higher barrel price will increase selling interest.
BUTTER:
The weakness of price Tuesday is not expected to indicate that the market has reached a top. Buyers and sellers are comfortable at the current level which should keep price supported but limited. Strong demand should continue over the next few weeks.
