OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 2 to 6 Higher |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 2 to 3 Higher |
| Soybean Meal Futures: | $2 to $4 Higher |
| Wheat Futures: | Mixed |
MILK:
There is stability in the dairy industry as far as milk supply and manufacturing is concerned. Milk receipts at the plant level are steady to slowly improving. Cow numbers are running below a year ago but are holding at a steady level. Futures do not look very exciting as we move ahead, and it will be difficult to see much improvement in cash flow under the current fundamental situation. Demand needs to improve through the end of the year to further support milk prices. USDA will release the World Agricultural Supply and Demand report Thursday morning, which will show estimates for milk production, milk prices, and dairy product prices for this year and next year.
CHEESE:
Block cheese price has held steady for the past three days, but that does not mean price has found solid support. Buyers and sellers have been comfortable at this level, seeing no need to be aggressive one way or the other. We need to see an increase in demand that will reduce inventory and not increased production that will add to inventory.
BUTTER:
It is interesting to see butter holding at this price. Sellers have not been aggressive, indicating supply is tighter than had been anticipated. Last year there was concern over a supply shortage. This year that concern has not been evident, but demand has exceeded production, resulting in a significant reduction of inventory pushing price higher. Nonfat dry milk has been trending higher and seems to be gaining further traction.
