OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 6 to 7 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 1 to 2 Higher |
MILK:
Traders will be cautious ahead of spot trading due to the uncertainty of the continued strength of cheese. Butter may remain choppy as buyers and sellers take care of business. The September Milk Production report will be released Monday afternoon and may set market direction through the rest of the year. If milk production in September was higher than a year earlier, it may limit the upside price potential. Cow numbers will remain significantly below a year ago, but production per cow is expected to be strong. I estimate milk production will be steady with a year ago and cow numbers 2,000 head more than in August. Hopefully, demand will improve through the rest of the year further drawing down inventory and support prices.
CHEESE:
It is uncertain whether further gains will be seen in cheese prices after the recent increases. Buyers may have sufficient supply on hand leaving them less aggressive. There may be limited upside potential unless demand improves more than it is through the end of the year. Cheese futures hold some premium on the idea cheese prices will strengthen through the end of the year.
BUTTER:
The butter price may struggle to see much upside with the current market fundamentals. The cold storage report will be released on Friday and is expected to show inventory higher than a year ago. Strong churning activity continues to provide an increased supply to the market reducing the amount of inventory decline.
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