OPENING CALLS:
| Class III Milk Futures: | 5 to 15 Higher |
| 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: | Mixed |
| Wheat Futures: | 2 to 4 Higher |
MILK:
Class III milk futures have taken a beating over the past two weeks as the underlying cash prices have declined. It had been anticipated that milk production would remain below a year ago and the decline would increase as time progresses. However, that has not been the case as milk per cow has improved and culling has slowed substantially. Farms are capitalizing on the demand for beef-on-dairy calves. This reduces the need to cull cows as aggressively for cash flow. Reduced feed prices allow lower producing cows to remain in the herd and pay for themselves. Milk futures may see some strength to end the week as traders may liquidate some of their short positions in case underlying cash prices bounce.
CHEESE:
Buyers could take advantage of the lower prices to purchase cheese for fill-in orders and replenish aging programs. Cheese demand is variable and likely variety specific. Some plants have much of their production already spoken for and are keeping up with demand. Others see slower demand than anticipated for this time of year. They are trying to move cheese to the market to limit increasing plant inventory.
BUTTER:
The butter price has increased in the past few days, but upside potential is expected to be limited. Churning is active with cream readily available. Butter inventory is expected to end the year higher than last year. This may keep the price in a range for an extended period.
