OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Lower |
| Soybean Futures: | 7 to 10 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 4 to 6 Lower |
MILK:
Milk futures continued higher Tuesday as underlying cash supported prices. It was interesting that a steady block price was not considered as bearish to the market as sometimes it is. Traders seemed more interested in seeing an increase somewhere in the spot market to support futures. Both the Global Dairy Trade Auction and the Dairy Products report were not positive to the market and could play a more negative role over time, but that did not impact cash trading. Buyers and sellers are taking care of business as orders come in and fall and holiday buying continues. The sharp rally of the stock market Tuesday might have had an impact on some traders as it had a positive effect on the outside markets. However, overnight Dow futures are eliminating some of the gain.
CHEESE:
Cheese prices have been supported so far this week but there is concern over just how much strength will be seen. Higher prices may bring sellers back into the spot market more aggressively. Higher production of American and total cheese in August keeps sufficient supply for demand. The decline of cheese on the Global Dairy Trade auction Tuesday of 3.8% may indicate a slowing of demand in areas of the world due to struggling economies and higher prices.
BUTTER:
Butter may retest the record high with price Tuesday just 3 cents shy of that price. Buyer resistance surfaced last time price was at this level. It will be interesting to see if both consumer and international demand will be able to support this level. The Global Dairy Trade auction showed butter down 7%. That is the largest decline we have seen for quite some time.
