Tuesday Morning Dairy Market Update - Limited Price Movement Expected

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Lower
Soybean Futures:	3 to 4 Lower
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	3 to 4 Lower

MILK:

Milk futures continue to struggle with little support from underlying cash. Price increases have been short-lived, and this is expected to continue through the rest of the year. There is little expectation for a surge in demand that would tighten supplies. Higher milk production will keep up with increasing demand. This will eliminate any concern over milk supply at the plant level or the supply of dairy products at the consumer level. Feed prices will remain less expensive as harvest progresses, and large supplies are expected to remain available throughout the year.

CHEESE:

The weakness in block cheese might bring buyers back in more aggressively to take advantage of the lower price. However, a price will be limited as there is sufficient cheese available, as cheese output increases due to higher milk receipts.

BUTTER:

Export sales are expected to remain strong, but the volume of exports is unavailable due to the government shutdown. The substantially higher world price should keep international demand strong. Domestic butter demand is steady to higher, with supplies sufficient for demand.