OPENING CALLS:
| Class III Milk Futures: | 4 to 6 Higher |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 2 to 4 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 1 to 3 Lower |
MILK:
Traders did not react positively to the strength of cheese prices Tuesday. They remain cautious over the duration of the potential for prices to continue to find strength. Milk supply has not yet tightened and demand has not increased more than it has been. Most schools are back in session, which increases the demand from bottlers to supply school accounts. Milk production has been steady to slightly higher with generally mild weather in most areas. Those areas that have had adverse weather have not indicated any loss of milk at this point. Farms have gone out of business, but many of those cows have moved to other farms that have room or have expanded. Wednesday is the last trading day for December futures and options with the Federal Order prices announced on Thursday.
CHEESE:
The strength of cheese prices on Tuesday is not expected to continue for an extended duration. Traders remain cautious as the choppy pattern of last year may still be intact. This is a period of generally slower demand during which inventories build. Milk supply will need to tighten and/or demand will need to improve to allow the market to trend higher. The Global Dairy Trade auction showed cheddar cheese price declining 2.4% indicting lackluster international demand.
BUTTER:
Price moved to the previous level of a month ago. Price then fell back substantially from the level. It will be interesting to see if the same takes place this time. This level might find buyer resistance due to the higher amount of inventory and strong churning activity.
