OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 6 to 10 Higher |
| Soybean Meal Futures: | $4 to $6 Higher |
| Wheat Futures: | 11 to 14 Higher |
MILK:
Milk futures showed another rebound of prices even though the overall market sentiment is bearish. The increase in barrels over the past three days resulted in some short covering with limited interest in establishing any long-term bullish positions. When looking at the market at the present time, there is little to get excited about. With milk production improving and the holiday forward buying potentially near a peak, price may have limited upside. Outside markets are also a strong factor having an influence on the market. USDA will release the September Milk Production report. I estimate milk production to be up 1.2%t from a year ago with cow numbers up 2,000 head from August.
CHEESE:
Barrel supply is tighter than blocks keeping the spread inverted where it has been for an extended period. Inventory of cheese is large and is not expected to close the year below the level of last year. Cheese production has been improving with some plants indicating they are having difficulty keeping up with orders. If only demand would remain this strong through the end of the year, milk prices may show more promise.
BUTTER:
It will be interesting to see how butter supply and price will fair through the end of the year. Inventory has not been able to gain on last year and is not expected to through the end of the year. Price may remain high even after the holiday season unless high retail prices impact demand more than anticipated. Ice cream production has slowed but an increase in cream demand from Class II products has absorbed the extra cream. However, there is sufficient available for churning.
