OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 3 to 4 Lower |
MILK:
The slight weakness of blocks and the significant decline of butter spot prices yesterday did not have much impact on the market. Class III futures closed higher with Class IV futures ending mixed. Milk futures were not under pressure overnight indicating traders did not feel the market was overdone to the upside. It is unlikely futures will continue to move higher through the end of the year. Volatility will remain as buyers and sellers of cash do business as orders are placed and they need to purchase supply in the country or come to the daily spot market. Slowly improving milk production will increase manufacturing allowing more cheese to be available for the market. USDA will release the World Agricultural Supply and Demand report today which will provide their estimates for milk production, milk prices, and dairy product prices. The anticipation is that estimates for milk prices and product prices will be lowered.
CHEESE:
Traders are uncertain whether cheese prices may have reached a level at which buyers may resist paying more or whether they need to remain aggressive to purchase for continuing orders. It has been nice to see the recent price increases, but those increases may be limited. The hope is that they at least hold for a period. Inventory remains large which might limit price potential.
BUTTER:
Butter price has been a Yoyo as the market is trying to find a level of equilibrium. A wild low bid and volatility during spot trading make price movement difficult to predict. One thing for certain is that the high is in for a while. Increasing butter production will add supply reducing the concern over a tight market.
