OPENING CALLS:
| Class III Milk Futures: | 10 to 15 Lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 5 to 8 Higher |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 1 to 3 Higher |
MILK:
Class III milk futures were able to hold well Monday despite substantially lower prices during the day. Unusually high trading volume was able to provide support. However, overnight trade indicates the anticipation of further weakness of underlying cash. Steadily increasing milk production will leave sufficient supply for demand. Cheese and butter production is increasing, leaving little reason for buyers to be concerned over supply. Milk production is not anticipated to slow down through the winter as feed supply is plentiful for the most part. President Biden has called on congress to adopt a tentative labor agreement to avoid a railroad shutdown. The House will vote to adopt a tentative agreement, in essence forcing the unions to adopt the agreement and keep working. The last time this happened was in 1991 when congress passed and an agreement ordering railroad workers back to work after a 24-hour shutdown.
CHEESE:
Block cheese seems to be the category that will continue to weaken and narrow the gap between it and barrels. It is unlikely barrels will see much strength and, if they do, it may be short-lived. Most cheese for the holidays and been ordered and delivered or will be delivered over the next few weeks. With increasing cheese production, there is plenty of product available to meet demand.
BUTTER:
Price does not give the impression it will decline very much. However, once holiday demand is filled, price may settle back as buyers will no longer be aggressive. The next few weeks will be interesting as cash and December futures will need to converge with futures currently about 26 cents below cash.
