OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 4 to 6 Lower |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 10 to 12 Lower |
MILK:
The underlying cash prices are not providing any reason for Class III futures to trend higher. The September, October, and November contracts made new lows as premiums continue to erode. The fact that price strength has not been seen to this point does not bode well for the market moving forward. Cheese and butter prices should see support as buyers prepare for upcoming fall and holiday demand. However, milk production is sufficient for bottling and manufacturing, leaving little reason for buyers to be concerned over supplies. Increasing demand may be met with increasing milk production. Lower milk prices have not been much of a concern due to high calf prices. However, calf prices are declining in the near term, impacting cash flow.
CHEESE:
Cheese prices are not expected to trend higher anytime soon. Supply and demand seem balanced, resulting in the market remaining choppy. Cheese production remains steady even though more milk is moving to bottling for school accounts.
BUTTER:
There is little reason for the butter price to increase. Churns are running on full schedules, providing sufficient supply for retail and food service demand as well as slowly building inventory. Manufacturers continue to offer butter on the daily spot market, limiting the upside price potential.
