OPENING CALLS:
| Class III Milk Futures: | 5 to 8 Lower |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Lower |
| Soybean Futures: | 12 to 15 Lower |
| Soybean Meal Futures: | $2 to $4 Lower |
| Wheat Futures: | 6 to 8 Lower |
MILK:
There is little support for milk futures as underlying cash markets are not trending in any direction. Improving milk production will keep a sufficient supply of milk for bottling and manufacturing without any supply tightness. Under the current market situation, prices are not expected to see much upside potential. October is a strong period of demand as cheese and butter are purchased to prepare for the holiday season. Buying will remain strong but not as aggressive during November and December. Buyers have been purchasing ahead for quite some time already and have been able to purchase much of what they need without difficulty. Milk production will continue to improve as time progresses. Production per cow continues to increase significantly over a year ago.
CHEESE:
The block/barrel price spread come together significantly last week which may indicate the strong demand for barrel cheese has slowed and supply is more readily available for demand. USDA will release the September Cold Storage report today which is expected to show a decrease of cheese in storage from August. However, supply is expected to remain above a year ago.
BUTTER:
Butter has been in the news recently as consumers see high prices and there have been some concerns over a butter shortage. This may result in the impression that there is a shortage as consumers stock up more than usual in fear of not being able to purchase it when they want it. This leaves store shelves with favorite brands not always available. This feeds on itself like some of the shortages that have been seen since Covid began. Consumers purchase what they need and then some to make sure they have extra on hand. Inventory is significantly below a year ago and is not expected to catch up through the rest of the year. However, production is ongoing.
