OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 2 to 3 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | 4 to 6 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 7 to 8 Lower |
MILK:
The decline of Class III milk futures on Wednesday reflected traders becoming nervous over the widening spread between blocks and barrels and continued diverging prices. Class IV milk futures fell due to the weakness of butter. The volatility of the cash market keeps traders cautious. It also had traders trading only for a short term to attempt to take a profit from the market rather than establishing long-term positions. Milk production is steady at the low end of the summer cycle and may remain this way for a few weeks before beginning to improve. The USDA will release the August Milk Production report on Friday which is expected to show milk production remaining below a year ago.
CHEESE:
The activity in the spot market on Wednesday with the bids and offers remaining at the close of trading suggests a further divergence of blocks and barrels today. This is a concern that once buyers of barrels have their needs filled, there could be a void in the market.
BUTTER:
The top has been established for the year. The price could hold around the $3.00 level for a time as the market balances supply with demand. Butter is readily available to the market. Churning is active and any shortfall of fresh supply is supplemented with inventory. Inventory is expected to remain above a year ago through the end of the year.
