OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | 13 to 15 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 3 to 4 Lower |
MILK:
The decline of Class III milk futures has been brutal, again solidifying the adage that markets will always fall faster than they increase. Lower prices should stimulate buying interest but that has not yet taken place. Milk production was stronger during the month of August than anticipated, leaving little reason to believe milk supply will tighten anytime soon. Cow numbers remaining unchanged from the previous month does not suggest a contraction of the cow herd despite low milk prices. More, larger dairy have been struggling due to lower milk prices and tighter margins this year, but banks cannot afford to pull the financing and will work to pull them through this period of low milk prices and reduced margins. Smaller dairies have had the benefit of continued payment from the Dairy Margin Coverage program to make up for some of the difference.
CHEESE:
Cheese demand is improving overall, but that has not translated into higher prices. Cheese prices have fallen as manufacturers continue to have sufficient supplies available and are moving those to market rather than hold inventory. Buyers are holding back, seeing no need to become aggressive as long as supply is readily available.
BUTTER:
Price has had a nice increase this week, but upside potential may be limited. Buyers may reach a threshold and step back. Purchasing is being done for fourth quarter demand. Churning is active but is not keeping up with demand with inventory being used to supplement fresh supply.
