OPENING CALLS:
| Class III Milk Futures: | Steady to 5 lower |
| Class IV Milk Futures: | 4 to 6 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 4 to 6 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 2 to 4 Lower |
MILK:
The selling pressure on milk futures was substantial, moving the October Class III contract to the lowest close since Aug. 24. The nature of the market gives the impression sustainable gains will be difficult to achieve and hold. Even though underlying cash held steady Monday, a negative trade psychology took over, triggering selling. Caution will reign Tuesday morning until spot trading provides direction. Sufficient supply is available for demand, leaving traders grappling with seasonal demand and supply available for demand. Maybe this will be as good as it gets, leaving much to be desired for milk prices. The World Agricultural Supply and Demand report will be released Tuesday, providing USDA's estimate of milk production, milk prices, and dairy product prices for the year and next year.
CHEESE:
The stability of cheese prices Monday should have provided support to the market, but traders seemed to focus on the inability of cash to increase and on the decrease of the dry whey price. October cheese futures traded overnight at a lower price leaving little to no premium in futures relative to cash.
BUTTER:
Price is expected to remain in a sideways pattern as supply and demand are balanced with buyers unconcerned over supply though the end of the year. Buyers have been able to purchase butter on the spot market without having to chase after supply. This has allowed them to increase ownership without difficulty and may leave them less aggressive later in the year as holiday demand increases.
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