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 2 Higher |
| Soybean Futures: | 7 to 9 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 4 to 6 Higher |
MILK:
Overnight trade is mixed with November higher while October and February contracts are lower. Traders will not be aggressive buyers as there is little to get excited about in the current market. Milk futures continue to decline due to underlying cash weakness. Class III futures have fallen substantially more than Class IV due to butter showing limited losses in comparison to cheese. Current milk supply is sufficient for both manufacturing and bottling demand. Production is slowly improving seasonally as cooler weather improves cow comfort and feed supplies are of good quality in most cases. The cost of production is high and may be increasing as there is a shortage of diesel fuel developing that may push price higher. Electricity rates are also increasing in many areas among other things. These will not be compensated for through the Dairy Margin Coverage program and will need to be absorbed. December and January Class III futures closing below $19.00 was a difficult thing to see.
CHEESE:
Cheese prices have been down at these levels in September and then moved higher. However, that may be less likely due to the time of year. Buyers were more aggressive, looking ahead to holiday demand and purchasing to obtain supply for orders from companies preparing for the holidays. That may not be the case now as much of that demand may be filled. Demand will be ongoing, but not as aggressive as it had been. Buyers can obtain cheese in the country as there are sufficient supplies available.
BUTTER:
Price is holding well with only minor weakness taking place so far this week. Downside may be limited in the near term, but weakness is anticipated before the end of the year. Churning is increasing but not by leaps and bounds. Plants are increasing production as they are able.
