OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Higher |
| Soybean Futures: | 6 to 8 Higher |
| Soybean Meal Futures: | $2 to $4 Higher |
| Wheat Futures: | 4 to 6 Higher |
MILK:
Milk futures posted strong closes Tuesday, driven mainly by strength of dry whey and the combination of higher butter and nonfat dry milk. The attention may be switching to the powder markets rather than just focusing on cheese and butter. Buying interest may be improving as the holidays move closer. However, demand has remained steady. There needs to be an improvement in demand to provide the foundation for prices to trend higher. USDA will release the September Milk Production report Thursday, which is expected to see lower production than a year ago. However, cow numbers could be anywhere in comparison to August. Heavier culling rates have not decreased the herd as much as had been anticipated.
CHEESE:
Prices may not see large increases, but they may see a rebound in the coming days or weeks if buyers see the need to be more aggressive. However, the current supply is sufficient for demand and cheese output remains strong. Dry whey is the area that may be gaining greater attention as supply has been reduced and demand remains strong.
BUTTER:
The increase in butter price Tuesday indicates this market is real and not just inflated. Sellers have not been very aggressive, which has limited the weakness and resulted in a rebound in price as buyers needing supply had to bid up to get it. Inventory may have declined more than expected in September, tightening available supply. This could further supply price.
