OPENING CALLS:
| Class III Milk Futures: | Steady to 10 Lower |
| Class IV Milk Futures: | 5 to 8 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | Mixed |
MILK:
Class III milk futures were lower Monday in anticipation of and response to lower cheese prices. There is anticipation milk futures will remain under pressure the rest of this holiday-shortened week. Dairy markets will trade Tuesday and Wednesday and will be closed the rest of the week. The October Milk Production report was negative to the market as milk production remains above a year ago. Production per cow is strong and cow numbers are significantly higher than a year ago. The national dairy herd is 31,000 head higher than a year ago at 9.42 million head. This should keep milk production strong through the end of the year and into next year. There is concern over demand once the holiday period is over and consumers will be dealing with continued high food prices.
CHEESE:
The weakness of barrel cheese has been greater than expected, pushing price down to the lowest level since Aug. 8. Price may challenge the low of $1.7425 soon. If price would move below that level, it would move back to a level last seen in January. Blocks are in a better demand position, which may limit the decline for now. Buyers have not been interested in building inventory at this time but have been purchasing for immediate demand. USDA will release the October Cold Storage report Tuesday, which will provide some idea of supply and demand.
BUTTER:
The substantial rebound of butter Monday was a surprise due to the weakness experienced Friday. However, buyers wanted to take advantage of the lower price to increase ownership to meet demand. The inventory report will show a decline from September, but the decline may not be as great. The percentage of inventory compared to last year may be reduced as increased production may build supply.
