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 Higher |
| Soybean Futures: | 6 to 8 Higher |
| Soybean Meal Futures: | $3 to $5 Higher |
| Wheat Futures: | 3 to 5 Lower |
MILK:
Volatility has increased over the past week as we move closer toward the holiday demand period. Milk production has been holding steady recently with levels likely at the low for the year. Milk production per cow has been very strong, which moves production above year-earlier levels. This keeps sufficient milk available for both bottling and manufacturing. However, spot milk availability has tightened with price generally at class to $0.50 over class. I have heard some offers for spot milk as much as $2.00 higher. Cheese prices have been trending higher, yet traders are uncertain over the level of demand that will be seen relative to other years. Traders are quick to sell milk futures at any sign of price weakness of underlying cash. With the Feds increasing interest rates with further increases expected, the concern over demand the rest of the year is valid.
CHEESE:
The strength of barrel cheese is anticipated to hold block price higher. There has been some good buying interest recently for fresh cheese and that is not expected to end anytime soon. However, buyers will remain cautious over the level of holiday demand. Higher prices may limit the movement of cheese. USDA will release the August Cold Storage report Thursday afternoon.
BUTTER:
Price seems to have reached ceiling with buyers holding back as they see the more aggressive selling. There may be limited downside risk at this point but also limited upside potential. High price may limit end of the year buying. Butter futures currently indicate weaker prices through the end of the year.
