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: | 1 to 3 Lower |
| Soybean Futures: | 4 to 6 Higher |
| Soybean Meal Futures: | $3 to $4 Higher |
| Wheat Futures: | 14 to 17 Lower |
MILK:
Class III milk futures and cash cheese moved in opposite directions last week. Even with the week showing impressive cash gains, overnight trade did not show any strength. Traders seem to be anticipating the strength of underlying cash to run its course. However, it seems the recent rally may be real and not a run-up based on emotions. USDA will release the August Milk Production report Monday. It will be interesting to see how well farmers managed cows during the hot weather of August. I estimate milk production to be up 0.3% compared to a year ago with milk per cow continuing to show gains. I estimate cow numbers to increase 3,000 head from July.
CHEESE:
Cheese prices posted impressive gains last week with price unlikely to fall back Monday. Tightening cheese supplies at the plant level may bring buyers into the spot market more aggressively or at least looking for supplies at no worse than steady prices. Sellers may not need to chase the market lower in order to move product.
BUTTER:
Traders will wait to see whether further weakness will unfold due to high price curtailing demand or if buyers will take advantage of the price decline last week to increase their ownership of supply for expected upcoming demand. High butter prices may reduce the use of butter as a loss leader to get consumers into the grocery stores this year.
