OPENING CALLS:
| Class III Milk Futures: | 2 to 6 Higher |
| Class IV Milk Futures: | 4 to 6 Higher |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 10 to 12 Higher |
| Soybean Meal Futures: | $3 to $4 Higher |
| Wheat Futures: | 2 to 3 Higher |
MILK:
The October Class III contract moved closer to the $24.00 level in overnight trade reaching a high of $23.96. Further support in underlying cash may push the price back above that level. The demand for dairy products is variable with some plants indicating steady demand while others have difficulty filling orders. Some of this is due to the product and location. There have been some rumblings about the possibility of a two-year extension to the current Farm Bill. Congress needs to pass legislation to keep the government open by Sept. 30. This is also when the current one-year extension of the 2018 Farm Bill is set to expire. Farm groups are pressuring the government to get something done and not kick the can down the road. Time is running out.
CHEESE:
The cheese spot trading today will be interesting. The close of spot trading on Tuesday would suggest a further price divergence between blocks and barrels today. The spread is not expected to remain wide for very long, but it is uncertain which side will move to narrow the gap.
BUTTER:
The butter price may struggle to regain the previous high before the seasonal buying has run its course. The average butter price this year has exceeded any other year in history. The price has been trending higher compared to other years when the price showed substantial strength in the second half of the year. Buyers may have sufficient butter on hand and are not concerned about supply for the rest of the year.
