OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Lower |
| Soybean Futures: | 3 to 5 Lower |
| Soybean Meal Futures: | $1 to $3 Lower |
| Wheat Futures: | 8 to 11 Lower |
MILK:
There was pressure most of last week on milk futures. The weakness of block cheese was the driving force with a decline on the week of 10 cents. This was offset by the increase of barrels of 9.50 cents, but traders focused on blocks. After this realization and having the weekend to think about why milk futures declined, traders may decide to buy the market either through short-covering or in the realization that futures should not have declined as they had. However, the futures market is an anticipatory market and traders felt the outlook was not as friendly as it was the previous week. Outside pressure was also put on milk futures from the financial markets as the stock market fell and fears of a recession moved into the forefront of concerns. Milk production is holding at lower levels or increasing depending on area of the country.
CHEESE:
Block cheese price may have fallen enough to get the interest of buyers. There is demand for fresh cheese and the holiday buying is still ongoing. There are some reports that manufacturers stocks have tightened, resulting in some plants limiting the amount of cheese for filling orders for the time being. This does not seem to be widespread, but it should provide some support.
BUTTER:
Price may be in a holding pattern. Supply is tighter and demand is good. End users are concerned over the lower inventory and the inability of manufacturers to replenish inventory. The recent USDA Cold Storage report indicated inventory is losing ground to the previous year, which will result in significantly lower stocks at the end of the year than last year. High price may begin to slow some demand.
