OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 5 to 8 Higher |
| Butter Futures: | 2 to 3 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 1 to 2 Lower |
| Soybean Meal Futures: | $1 to 2 Lower |
| Wheat Futures: | 3 to 4 Higher |
MILK:
Class III milk futures are not expected to show a change in direction. The block cheese price still has not yet found a bottom. Sufficient milk is available for processing as milk production remains higher than a year ago. According to the August Cold Storage report, cheese production is exceeding demand. The 2027 Dairy Margin Coverage program enrollment opens on Monday. The program will be expanded to 7 million pounds of milk under Tier 1 coverage. It will have a 25 percent premium reduction if coverage is secured through 2023.
CHEESE:
The continued strong cheese production is a reflection of increasing milk receipts at plants. The phenomenon we are seeing of increasing dry whey and nonfat dry milk prices may indicate that cheese and butter have moved into the realm of being a by-product rather than a main product as they historically have been. Cheese and butter are being produced to increase the output of dry whey and nonfat dry milk that is currently in strong demand.
BUTTER:
The bounce in the spot butter price was not reflected in butter futures, as traders are not convinced it has found a bottom. However, the fact that there were quite a few unfilled bids remaining at the close of spot trading the past two days may indicate buyers might become more aggressive.
