OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 1 Lower |
| Soybean Futures: | 3 to 4 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | Mixed |
MILK:
Class III milk futures have been choppy over the past two weeks, moving in a sideways trend. There is concern that cheese prices may have reached a peak for the year even though demand should increase and continue through the next two months. Buyers may have positioned themselves with inventory to meet contracts and feel confident sufficient supply will be available for demand. Milk production has been improving with output in August at the highest level so far this year compared to a year ago. Milk production per cow may improve and exceed the levels of a year ago as the weather cools and cow comfort improves.
CHEESE:
Block cheese remains weaker than barrels. This has the spread between blocks and barrels at a record 39 cents. The spread will not continue at this level indefinitely, but it is difficult to determine which category will move to meet the other. Without buyers showing up in the barrel market for the past three days, I would expect barrels to weaken in price.
BUTTER:
There may be further downsides in butter, as buyers have a sufficient supply on hand and expect strong churning to continue, limiting the draw on inventory to satisfy demand. Butter demand is improving with the industry having to prepare for the higher demand time of year.
