OPENING CALLS:
| Class III Milk Futures: | 5 to 15 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 1 Lower |
| Soybean Futures: | 1 to 2 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 6 to 8 Lower |
MILK:
The inability of spot cheese prices to increase on Thursday turned traders bearish with increased selling pressure through the end of the day. After the CME settled prices for the day further selling took place, pushing prices significantly lower. The CME settles prices for the day shortly after 2 p.m. CST, but trading continues until 4 p.m. CST. That is why closing prices can be much different than the final trading activity at the end of the day. Such was the case on Wednesday as Class III futures traded substantially lower into the close. That was reflected in overnight trade with contracts over 20 cents lower. Traders anticipated lower cheese prices and liquidated heavily. The USDA will release the November Milk Production report Thursday afternoon. I estimate milk production to be up 0.4% from a year ago with an increase of 3,000 cows from October.
CHEESE:
All eyes will be on spot cheese trading. Traders seem convinced cheese buyers have reached a threshold and will not bid higher. This could bring sellers into the market more aggressively as they try to take advantage of the higher prices. Volatility may be significant during and after spot trading.
BUTTER:
The butter price is expected to be choppy with little price direction. The price is expected to retest the low and possibly set a new low before the end of the year. Demand is good, but supply has been sufficient to satisfy the demand and to begin building inventory.
