OPENING CALLS:
| Class III Milk Futures: | Steady to 4 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 8 to 10 Higher |
| Soybean Meal Futures: | $3 to $4 Higher |
| Wheat Futures: | 4 to 5 Higher |
MILK:
The strength in the underlying spot cheese and dry whey prices has led to a notable increase in Class III futures. The market may be finding an equilibrium where supply and demand are balanced for the time being. If prices were to remain at current levels, it would be a vast improvement over what they were a few weeks ago. The key is whether prices will hold moving through the end of the year. The weather has been good for comfort, allowing for milk production to steadily increase. Bottlers and manufacturers are not concerned about the milk supply.
CHEESE:
Spot cheese prices have increased over the past two days and may be near a level at which sellers will become more aggressive, taking advantage of the higher prices. Cheese production has increased, but has not overwhelmed the market. Rather, it is keeping up with demand and limiting the decrease in inventory.
BUTTER:
The price may chop around at the current lower level. Business is being done and churning is active. Many plants are churning seven days a week to utilize the cream supply. This limits the amount of butter coming from inventory to supplement the fresh supply. Retail demand has been improving.
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