OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 2 to 3 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $4 to $6 Lower |
| Wheat Futures: | 1 to 3 Higher |
MILK:
Class III milk futures have settled back, eliminating recent gains. Traders will need to see strength in underlying cash to get them excited about buying back into futures more aggressively. Even if underlying cash shows strength, it may be difficult for prices to rise significantly as traders will remain cautious over sustained strength. Time is running out for the buying of cheese for holiday recutting and packaging with mainly regular and fill-in demand being the bulk of business as the holidays approach. Milk production continues to hold well with output slowly improving. Farms continue to exit the business while cow numbers remain higher than expected. The outlook for milk prices into next year has dimmed with futures showing limited seasonality.
CHEESE:
Cheese supplies are generally in line with demand. There is concern over the limited decline of inventory seen in September and that American cheese stocks are 1% above a year ago. Demand has not been as strong as hoped, leaving the market on the defensive. As long as sellers continue to offer on the spot market, buyers will hold back.
BUTTER:
Price may be on the way down, but it does not seem as if it will fall quickly. Buyers remain active even at the high price. Inventory in September did not decline as much as expected, which leaves stocks 3% above a year ago. Overall demand remains strong.
