OPENING CALLS:
| Class III Milk Futures: | 4 to 10 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 3 to 4 Lower |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | Mixed |
MILK:
Traders had been day trading or scalping the market, and it was not surprising that overnight trading showed lower prices as traders exited their long positions after the large increase on Thursday. The strength in the underlying cash cheese prices seems tied to buying for the holidays and not due to a supply shortage. Cheese buyers may have been aggressive as they are now leap-frogging over each other attempting to purchase at a lower price before further increases occur. This aggressive buying may be short-lived. Milk is available with production increasing seasonally. It will be interesting to see if milk production per cow continued to improve in November. USDA will release the November Milk Production report next Thursday.
CHEESE:
The recent increase in cheese prices has been a surprise due to sufficient supply, but it has not been a surprise due to the time of year and increased demand for fresh cheese. The recent strength may be temporary, but will hopefully hold at a higher level. Further strength may be seen Friday.
BUTTER:
Butter for the holidays has been shipped with manufacturers looking ahead to first-quarter demand. There could be some price gains in the spot market as fill-in buying may take place, but time is running out. Reports have indicated that inventory is beginning to build due to strong butter output and heavy cream supplies. This would limit the upside price potential in the near term.
