OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 1 Lower |
| Soybean Futures: | 2 to 3 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 4 to 5 Lower |
MILK:
Class III milk futures held up well despite the losses in the spot cheese and butter prices on Thursday. Futures closed mixed with pressure on closer months while later contracts closed higher. The same was not true for Class IV futures as they closed under substantial pressure. Low prices generally increase buyer interest but that has not been the case so far. Sellers of cheese and butter are having a difficult time finding buyers. Those who held out for higher prices when prices were increasing likely wish they had not, as prices have fallen significantly on limited trading activity. The current milk supply is sufficient for demand.
CHEESE:
The cold storage report was both positive and negative. Positive in the fact that cheese inventory for American cheese and total cheese was 6% below a year ago. Negative from the fact that the inventory of American cheese increased from July. It is unusual for inventory to gain during this time of year. Spot price may see further weakness.
BUTTER:
Butter stocks declined significantly in August but not enough to offset an increase in inventory from the previous year. Butter stocks are now 11% above a year ago. This may keep the upside price potential limited through the end of the year. Sufficient supply leaves buyers unaggressive and content to purchase on price weakness.
