OPENING CALLS:
| Class III Milk Futures: | 10 to 15 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 3 Higher |
| Soybean Futures: | 12 to 15 Higher |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 12 to 14 Higher |
MILK:
Milk futures continued to push higher yesterday in reaction to higher cheese prices. This has improved the price outlook immensely for the time being. Whether the market can retrace much of what it lost in June will be seen. Demand has not changed dramatically with the strength likely due to increased buying of cheese from those who have been holding back purchasing on an as-needed basis for much of the summer. With the increase of underlying cash, traders are short covering and buying futures more aggressively. There may be a limit to how much strength there will be, but there is no way of anticipating where buyer resistance might be. Milk futures are moving with underlying cash and, as long as cash holds or gains, milk futures will be supported.
CHEESE:
Buyers of cheese have been purchasing as needed for much of the summer. They had purchased more aggressively earlier in the year when cheese prices continued to increase into April as there was a fear of a tight supply due to the liquidation of cows and reduced milk production which began in 2021. The milk supply did not tighten as much as anticipated resulting in buyers not needing to purchase as much and what they needed could be obtained through regular channels. That may be changing now that buyers are looking ahead to the holiday season and prices are increasing triggering more aggressive buying.
BUTTER:
A tighter butter supply due to reduced churning through much of this year has moved butter to a record high. It does not appear price will fall anytime soon and maybe not until much of the holiday demand is filled. Butter price in stores has increased substantially which may have an impact on overall demand moving closer to the holidays. Butter has generally been a favorite product used as a loss-leader to get consumers into stores. With the current price, this may not be quite as popular to use as a loss-leader.
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