OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 5 to 7 Higher |
| Soybean Futures: | 12 to 16 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 5 to 8 Lower |
MILK:
It will be an interesting week for milk futures as the strength in Class III last week surfaced due to anticipation and not reality. Underlying cash cheese prices did not support the rally in futures. Class IV was a different story as both butter and nonfat dry milk prices increased. There is a sense of seasonal prices strength which may result in cheese prices trending higher. Milk futures through the end of next year are again above $20.00 with November, December, and January above $21.00. Milk production is holding well despite higher input costs, the impact of hot weather, and higher fuel costs. Some areas will have less than optimal feed supplies with lower feed quality while others have put up excellent forage this summer with a good corn crop to be harvested. Milk production is expected to increase next year.
CHEESE:
It is uncertain whether cheese prices have found a bottom. The weakness of blocks on Friday may keep buyers less aggressive. Buyers are picking up supply through regular channels in the country leaving little reason to come to the daily spot market aggressively. Inventory continues to increase eliminating any concern over supply tightness.
BUTTER:
Butter is finding more support as buyers are aggressively increasing ownership through the end of the year. Lower butter production due to labor shortages and the desire to sell cream rather than churn it has left inventory unable to gain on last year remaining 21% lower. Price should hold and develop an upper trading range.
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