OPENING CALLS:
| Class III Milk Futures: | 10 to 20 Lower |
| Class IV Milk Futures: | 5 to 8 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 8 to 10 Lower |
| Soybean Meal Futures: | $7 to $8 Lower |
| Wheat Futures: | 6 to 8 Lower |
MILK:
It was not surprising to see selling pressure in the overnight trade. The CME settles the market shortly after 2 p.m. CDT while trading continues for another two hours. Those last hours showed further pressure on the market, which was reflected in overnight trade. It does not seem there is any bearish development with price weakness expected to be limited. However, further weakness in the underlying could trigger short-term aggressive selling. The HPAI flu has been discovered in three dairies in California. Fourteen states have now had cases of the HPAI flu. This is not considered a significant health threat but it remains a concern as it impacts milk production on those affected dairies for a time.
CHEESE:
Traders are being cautious over the potential of cheese prices. Spot prices may stabilize for a period as supply and demand are assessed. Traders do not feel there is much downside risk, but price strength may be limited unless demand improves. Buyers are generally more aggressive at this time of year as they prepare for fall and holiday demand.
BUTTER:
It has been surprising butter price has not found greater support. Demand is reported to be improving both domestically and internationally. However, butter inventory is higher than a year ago and churning remains active. Buyers do not seem to be concerned over a shortage for the foreseeable future. The price may be near a level at which buyers may step in more aggressively.
