OPENING CALLS:
| Class III Milk Futures: | 6 to 10 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 1 to 2 Higher |
| Soybean Meal Futures: | $3 to $4 Higher |
| Wheat Futures: | 2 to 3 Higher |
MILK:
Overnight trading in Class III futures was moderate, with prices higher. There is no reason for continued strength to develop, as the milk supply is plentiful. The trading activity remains confined to traders scalping the market with short-term positions in an attempt to take a small profit. Further weakness is likely, but traders do not want to load up on short positions in the event that something unexpected surfaces in the market. Culling may increase, as indicated by the October production report. Substantial pressure on cattle prices will have an impact on calf prices. This may increase the need for culling more heavily.
CHEESE:
It is uncertain where cheese prices may find support. A new low for the year in blocks does not bode well as we move through the holiday season. There is sufficient milk available for cheese plants with increased volume available as milk is diverted from bottling to the spot market over Thanksgiving.
BUTTER:
Increased demand for butter has not been sufficient to support the price. The high butterfat component in milk keeps the cream supply higher than usual. Butter output in August was 8.0% above the previous year, with September and October likely showing similar gains when those reports are released.
