OPENING CALLS:
| Class III Milk Futures: | 2 to 5 Higher |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 10 to 12 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | Mixed |
MILK:
Class III futures showed further aggressive buying in overnight trade. The October contract reached $24.00. It seems traders think underlying cash prices may see further gains. This may be possible as cheese prices rise on limited activity as buyers find limited interest from sellers. Lower milk production from a year ago generates concern over the ongoing milk supply and whether there will be sufficient to meet demand. Cooler weather will improve milk production but it is expected to remain below the level of a year ago. The rebound of milk supply may not be as great as it usually is due to lower cow numbers and production per cow.
CHEESE:
Cheese prices have been rising as buyers are more aggressive. Buyers are not waiting for price weakness but want to increase ownership for later demand. This has moved the market into the mode where buyers attempt to outbid each other. Sellers anticipate higher prices and hold back selling supply on the spot market.
BUTTER:
The butter price remains supported but does not share the same fundamentals as cheese. Inventory is higher and churning is active. Demand is increasing but is readily met with both fresh and inventoried supply. The limited price movement of butter compared to cheese has resulted in Class III futures above Class IV in nearby months.
