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: | Steady to 2 Lower |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 6 to 9 Lower |
MILK:
Milk futures were under pressure yesterday but follow through trading overnight was confined to December. Liquidation did not continue as traders saw yesterday as being overdone relative to underlying cash. Bottling demand has been steady with cheese production slowly increasing. Harvest has been progressing rapidly in many areas increasing feed inventories. Some problems remain in getting feed to some areas that are deficit with the potential of a rail strike, not something that farmers want to hear. It has been a tough year for many, and it does not look like it will change much for the rest of the year. Income over feed has fallen to the lowest level it has been in a year. USDA will release the World Agricultural Supply and Demand report today which will provide their estimates for milk production, milk prices and product prices for this year and next year. I expect milk production to be raised as well as butter price from the September report.
CHEESE:
The minor decline in barrel cheese price yesterday should not have triggered the selling it had in Class III futures. However, traders did not like the fact that no buyers showed up during spot trading. That resulted in more selling as it could indicate lower prices may unfold as sellers want to move product. Traders are only taking short-term positions rather than long-term positions as the market remains choppy.
BUTTER:
The decline of butter certainly was not unexpected. After all, price is at historical highs. Ongoing demand is uncertain, but it remains strong at the present time. Price will remain choppy and may challenge and exceed the record high of last week.
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