OPENING CALLS:
| Class III Milk Futures: | 5 to 15 Higher |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 8 to 10 Lower |
| Soybean Futures: | 12 to 14 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 12 to 16 Lower |
MILK:
Milk futures are higher overnight in reaction to the August Cold Storage report. The fact that inventory declined in all categories indicated strong demand during the month. Seasonally, inventory should have declined, but the uncertainty over demand during the month made the decline more important than usual. This provided some buying interest in Class III futures overnight which should carry through Friday morning. Again, as was the case with the milk production report earlier this week, cash trading activity may not be influenced by the report as that has already been absorbed into the market. With milk production slowly beginning to improve and demand holding well, there should be sufficient supply for demand leaving the market following a season pattern. One caution is that a seasonal pattern generally shows a peak of milk prices in October.
CHEESE:
The weakness of blocks Thursday may have moved price to a level at which buyers may step up to the plate and take advantage of the decline. A strong barrel market may provide some spillover support to blocks. Although cheese inventory declined during August, the fact that the categories of other cheese and total cheese still showed record high inventories for the month.
BUTTER:
The bullish implications of butter inventory on the report should continue to provide support under the market. Stocks being 22% below a year ago clearly indicates inventory at the end of the year will close significantly below a year ago. This should provide support for quite some time as it will take a while to rebuild those stocks
