Tuesday Morning Dairy Market Update - Buying Interest Surfaces in Overnight Trade

OPENING CALLS:

Class III Milk Futures:	4 to 8 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 4 Higher
Soybean Futures:	10 to 14 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	1 to 3 Lower

MILK:

There was quite a price swing in September Class III milk futures overnight with futures up 40 cents at the time of this writing. Price established a low of $17.62 to a high of $18.05 in overnight activity. Other contracts are moderately higher without quite the price swing. This may be an indication of a change in attitude as steady cheese and butter prices Monday may now be viewed as supportive due to prices being at the lower end of the range. It is difficult to determine how aggressive buyers will be during the spot market Tuesday, but any buying interest is likely to have limited upside potential. Plentiful milk supplies leaves manufacturers with more than enough milk to keep production high and plants running on full schedules.

CHEESE:

Cheese inventory has not been growing seasonally but that has not provided support to the market. Sellers continue to move cheese even at lower prices while buyers are purchasing supply as needed rather than purchasing aggressively to build inventory for later in the year. Demand will need to increase, or prices will remain low for an extended period.

BUTTER:

Price may be at the low end of the range and may bounce. However, neither buyers nor sellers are aggressive, but are doing business as needed. International demand has slowed with exports down significantly from a year ago.