Wednesday Morning Dairy Market Update - Cash Prices Expected to Remain Choppy

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	3 to 4 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	5 to 6 Lower

MILK:

Traders have not seen the need to get excited over price direction. The underlying cash prices seem to be in a range with buyers and sellers comfortable at current levels. The milk production and cold storage reports have been digested by trade. The current level of supply and demand does not indicate an oversupply or an undersupply of milk or dairy products. Demand has not been exceptional and even though cheese inventory is below a year ago, buyers are comfortable and purchasing as needed. The October Federal Order class prices will be released today. The November contract is the lead month and is about half-priced.

CHEESE:

The choppiness of cheese prices may continue as buyers and sellers are comfortable with supply and taking care of business as necessary. There is little desire to build inventory. Cheese production is steady.

BUTTER:

Higher butter inventory and strong butter production will limit the upside price potential through the end of the year and into the following year. The cream supply is higher than usual keeping churns running on full schedules, with some having to sell excess cream to the market. Inventory is expected to remain higher than the previous year for the foreseeable future.