OPENING CALLS:
| Class III Milk Futures: | 2 to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 4 to 6 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 3 to 5 Higher |
MILK:
Milk futures are having difficulty rebounding after the recent price plummet. Traders have not been comfortable with buying into the market due to the inability of underlying cash to trend higher. A sufficient milk supply keeps the market balanced and traders cautious over upside price potential. Weather is conducive for cow comfort with milk production steady to higher. Class III milk futures need to find support from underlying cash to regain the losses, but buyers of cheese continue to remain unaggressive. Class IV futures continue to do well with butter making new highs as buyers remain aggressive to increase ownership of product.
CHEESE:
The increase of American cheese inventory in August was unusual and likely one reason buyers on the daily spot market have not been very aggressive. There is sufficient supply available through current production and then some. Inventory is expected to decline in the next few months, but the decline may be less than usual. Strong buyer interest needs to develop in cheese soon or prices may not get much better through the end of the year.
BUTTER:
Buyers continue to outbid each other to obtain supply. The duration of this strength is difficult to determine, but the upside may be limited. Last year, the market ran out of steam and turned lower during the first half of October. That may not be the case this year, but it is something to be aware of. The large decline of inventory in August should be supportive.
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