OPENING CALLS:
| Class III Milk Futures: | Steady to 10 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 8 to 12 Higher |
| Soybean Meal Futures: | $3 to $4 Higher |
| Wheat Futures: | 5 to 7 Higher |
MILK:
Class III milk futures have not been able to find support due to the weakness of cheese. Traders may become less interested in buying into the market due to time of year and limited trading activity of cheese. The December contract is reflecting further price weakness with price below $20.00. There has been quite a bit of volatility during the past year, but that may be limited as we move through the end of the year. Increasing milk production with increasing cheese and butter production will leave sufficient supply available to the market. Some input prices have been decreasing, which will help to improve the cost of production; but overall input prices remain high. Yet, adjustments have been made and milk production is running above a year ago. The November Federal order class prices will be announced Wednesday. USDA will release the October Agricultural Prices report this afternoon, which will provide prices used to calculate income over feed for the Dairy Margin Coverage program.
CHEESE:
The block/barrel spread has been narrowing and should continue to do so as blocks are expected to weaken more than barrels. The big demand push for the holidays seems to be mostly finished, leaving buyers less aggressive in the market. Spot prices may be choppy, but the overall trend seems to be down.
BUTTER:
Spot trading activity of butter has slowed but buyers and sellers remain comfortable at the current price level. Increased butter production will keep the market supplied and could rebuild inventory. The feared butter shortage increased demand for a period but that has run its course, leaving end users with extra butter on hand for the time being.
