OPENING CALLS:
| Class III Milk Futures: | 5 to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 1 to 3 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | Mixed |
MILK:
Class III milk futures were under substantial pressure on Monday despite the increase in cheese prices. Traders have not been taking long-term positions for quite some time and have been trading the volatility when possible. Some of the long positions established last week were unwound on Monday as traders decided to take some profits. That made Class III milk futures move in the opposite direction as indicated by spot trading. There is concern the upside potential of cheese may be limited, but a decline in futures will be viewed as a buying opportunity for hopefully trading a price bounce. Hedgers took advantage of the recent higher prices while traders are looking mainly to take a quick profit if they guess correctly.
CHEESE:
The block cheese price is nearing the high from two months ago, which is increasing the caution of traders. The spot market does not trade technically, but the reasons the cheese price fell back then may be similar now. The difference is it is nearer the time when demand increases for the fall and holidays.
BUTTER:
The butter price has not been able to find support since the end of June. With reduced cream supplies and plants running five days a week, steady retail demand, strong export demand, and lower inventories than a year ago, it would seem the market would be better supported. However, there is sufficient supply for demand, with buyers not yet ready to purchase aggressively for upcoming demand.
