OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 2 to 4 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Lower |
| Soybean Futures: | 3 to 4 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 4 to 6 Lower |
MILK:
Traders focused on further weakness of blocks and the decrease of dry whey Monday putting pressure on nearby Class III futures. Overnight trading was very light and showed higher prices. However, that may dim somewhat depending on trader sentiment as spot trading moves closer. Prices are unable to find sustained strength to develop a trend higher. Demand is good but not good enough to tighten supply and improve prices. Milk production is increasing as cow comfort has improved. Production is not overwhelming the market as spot milk continues to be available at a premium to class. Time is running out for a seasonal increase in prices as buying is being done for the holidays without much fanfare.
CHEESE:
The block/barrels spread is now at 3 cents. Historically, that is where the market generally tried to remain as processors liked the spread as far as pricing was concerned. However, the general spread is not the usual anymore as each category runs on its own fundamentals resulting in consistently wide spreads or inverted spreads.
BUTTER:
Business may continue to be done at this price level as buyers need to purchase at the current level to satisfy demand. Inventory is expected to have decreased in September, which may continue to support the market. We will see that in USDA's Cold Storage report Wednesday.
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