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: | 4 to 6 Lower |
| Soybean Futures: | 10 to 14 Lower |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 16 to 20 Lower |
MILK:
It was interesting to see greater pressure develop in Class III futures during late trading after the markets were settled Tuesday. Traders have been taking only short-term positions and might have become a bit nervous at current levels and decided to liquidate some positions just in case buyers of cheese and butter have their current needs filled. Class III contracts have eliminated the entire losses that have happened over the past month. It is difficult to say whether the large decline was an aberration or an indication of things to come. Hopefully, it was an aberration as a decline to these lows would be very difficult financially. There is concern over demand for dairy products once holiday buying is finished as consumers deal with high food prices. There may be some pressure on milk futures ahead of cash if traders are nervous.
CHEESE:
There has been no indication of buyer resistance at current prices. However, the minor swing of barrel price during spot trading may indicate price may be reaching a threshold. The current price rally is nearly identical to the price rally during the first half of September. This may increase the caution of traders.
BUTTER:
Price has regained much of what it lost when price fell dramatically. Buyers took advantage of the lower price to purchase more supply and they have not yet finished those purchases. Price never should have declined as much as it had but the quick rebound may also be overdone. Traders anticipate lower prices as butter futures are trading at a significant discount.
