OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 8 to 10 Lower |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 2 to 3 Higher |
MILK:
Class III milk futures took the heat again Wednesday, posting double-digit losses in response to the weakness of block cheese. Without underlying cash trending higher, futures will have a difficult time finding solid footing. Milk production remains sufficient for demand from bottlers and manufacturers. A sufficient milk supply and cheese supply leaves buyers unaggressive in the market. Buying for the current demand and the upcoming holidays is happening without buyers having to be aggressive. Sellers continue to move product rather than move it to inventory. However, the slight growth of inventory in August was not usual and may indicate demand has not been able to absorb current production. End users may limit purchases as long as possible to reduce storage costs and to match purchases with demand rather than purchasing too much ahead of time. Steady milk production means a sufficient supply for demand. The September Federal Order prices were announced with a Class II price of $19.98, an increase of $0.07 from August. Class III was $18.39, up $1.20 from the previous month. Class IV was $19.09, up $0.18 from August.
CHEESE:
Cheese production in August was not much higher than a year earlier, which should provide some support to the market. However, demand has not been good enough to reduce supply sufficiently to cause buyers to become more aggressive in their purchases. Manufacturers are moving cheese to the market as quickly as possible at whatever the price. Sellers do not want to pay for storage and buyers do not want to pay for storage any longer than they need to.
BUTTER:
Butter continues to see buying interest even at record prices. The Dairy Products report sheds some light on this as August output was 2.1% below a year ago with production 12.1% below July. This has been factored into the market with current strength likely indicating a further decline in production during September.
