OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 2 to 3 Lower |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 8 to 10 Higher |
MILK:
Class III milk futures took a beating over the past two days with futures falling further than underlying cash would indicate. This should uncover some buying interest, especially if underlying cheese prices would stabilize or increase. Even though milk production is below a year ago, supply is sufficient for current demand, leaving the market unconcerned over supply. World prices have been an anchor on price potential as international demand has been subdued. China's demand for dairy products on the World market has been lower in part due to their struggling economic situation. World prices have an impact on domestic prices as it impacts the U.S. ability to export if domestic prices are too high. Demand needs to increase both domestically and internationally. USDA raised their estimates for milk prices in the WASDE report Tuesday, but that had no impact on trade.
CHEESE:
It is unclear where the level of cheese prices needs to be to increase buying interest. Limited cash activity with limited buyer interest does not bode well as lower prices did not trigger buying interest. Buying interest usually increases this time of year.
BUTTER:
Price remains surprisingly resilient even though there has been heavy volume traded on the spot market over the past few weeks. Buyers take advantage of lower prices to increase ownership for later demand. This should keep price in a range with upside potential limited.
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