OPENING CALLS:
| Class III Milk Futures: | 5 to 12 Lower |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | Steady to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | 3 to 5 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 4 to 6 Lower |
MILK:
Milk futures had fallen substantially prior to the August Milk Production report, but the bearish implications of the report put further pressure on overnight milk futures. Class III milk futures were at this level about a month ago and price rallied as buyers of cheese became more aggressive, taking advantage of the lower prices. It is difficult to say whether this will take place again. Time of year would suggest greater buying interest as demand is good and expected to increase. But sufficient supply may keep buyers from being too aggressive as sellers continue to offer product on the spot market. Cow numbers remaining where they are should ensure sufficient milk for both bottling and manufacturing.
CHEESE:
Buyers and sellers of cheese likely will not do business based on the milk production report as that has already been factored into the market due to it being August production. However, it does indicate milk supply will remain sufficient, keeping cheese output strong. This limits any concern over supply though the rest of the year.
BUTTER:
Price is poised to move above the high of last week, which would move price back to the highest level since December. However, the current balance of supply and demand may make this difficult to achieve or maintain. Price potential may be limited as long as nonfat dry milk price remains rangebound due to plentiful supply.
