OPENING CALLS:
| Class III Milk Futures: | Steady to 8 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 7 to 10 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 4 to 6 Higher |
MILK:
The strength of Class III milk futures was the result of steady cheese prices. It is interesting to see how attitudes change from time to time. There are times when steady cheese prices are negative to milk futures as traders may feel a trend higher is in jeopardy of having reached a plateau. Then there are times when steady cheese prices turn traders more bullish as the trend lower may have found bottom with the potential to turn higher. Many times, steady cash prices are just a matter of who shows up in the spot market on any given day to do business and how aggressive they need or want to be, and it may have no bearing on trend. That is likely what took place Tuesday. Class III futures may trade lower into spot trading as it corrects from the strength likely being overdone yesterday.
CHEESE:
USDA will release the November Cold Storage report Wednesday afternoon. Cheese inventory is expected to show a decline during the month, but it is also expected to show inventory significantly higher than a year ago. The report may not necessarily be bearish, but it could indicate the upside might be limited as we move into next year.
BUTTER:
The strength of butter and volume during spot trading Tuesday is a testament to strong demand and the willingness of buyers to purchase for continued strong demand next year. Buyers are willing to purchase aggressively even at these higher prices as they anticipate tighter supply. Production should begin to increase as more cream becomes available, but inventory may be difficult to rebuild anytime soon.
