OPENING CALLS:
| Class III Milk Futures: | 5 to 8 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Lower |
| Soybean Futures: | 7 to 8 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 8 to 10 Lower |
MILK:
Class III futures continued to struggle on Monday despite the increase in the block cheese price. Traders have little reason to believe current fundamentals and the market trend will change anytime soon. Lower milk prices may increase the desire or need to produce more milk to maintain cash flow. However, higher milk output will keep milk supplies sufficient for demand and dairy products readily available. The concern is that demand is not keeping up. The USDA will release the August Milk Production report this afternoon. I estimate milk production to be 1.6 percent above a year ago and cow numbers down by 4,000 head from July. No Dairy Revenue Protection prices will be released this afternoon.
CHEESE:
Spot cheese prices are going nowhere. The trend is down, and price bounces are short-lived. Cheese production is steady and sufficient for demand. Manufacturing plants continue to offer cheese on the spot market to keep inventory from building at the plant level.
BUTTER:
Butter demand is not as strong as it generally is at this time of year. Buyers see no need to be aggressive as they continue to purchase supplies at lower prices. International demand remains strong, but it is not enough to tighten the supply. Numerous butter plants have moved to operating six days a week as the cream supply increases.
