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: | 6 to 8 Lower |
| Soybean Meal Futures: | $0.50 to $1 Lower |
| Wheat Futures: | 3 to 4 Lower |
MILK:
The large decline in milk futures on Tuesday seemed to be a reaction to the weakness of barrel cheese and not the overall market. The gain in the block price more than offset the loss of barrels. Traders will be cautious on Wednesday, and those who sold the market on Tuesday may buy back those positions today if they have some profit. Traders are not trading positions for the long term but continue to scalp the market in hopes of making small profits. The USDA will release the October Milk Production report Wednesday. I estimate milk production to be 0.2% above a year ago with cow numbers up 3,000 head from September. Milk production should have remained strong compared to a year ago.
CHEESE:
Cheese prices could go either way today based on Tuesday's action. The weakness of barrels may have been sellers wanting to move supply more aggressively finding buyers at the lower price. It may not be that the price has reached a threshold. Further upside may be seen in blocks as buyers seemed to have turned more aggressive realizing they need to take advantage of these lower prices.
BUTTER:
The butter price may continue to struggle as the supply is larger than last year with production running higher than last year. Retail demand is improving as the holiday season approaches. Food service demand is lighter and not expected to improve much in the near term.
