We look for milk to open slightly higher.
Butter futures caught a break from the recent onslaught of sell pressure Thursday trading just 29 contracts and finishing mostly unchanged. Sell interest was piqued during the cash market session, however, as the spot price appears to be playing catch up with the recent futures price weakness. Spot butter dropped 1.75 to finish at $1.86 after three trades occurred all at unchanged.
Many industry folks are asking us what the future holds for butter. While there is much to be unsure about in the world these days, the preponderance of current information points to a weaker butter market on the horizon. Production is robust, demand is fickle to slow, and once the holiday sales are behind us; few markets seem so well poised for more weakness. That said, the futures market has endured much selling of late and we expect some level of short term support to fall in soon, if not at current levels. In other words, for now we expect that futures downside is limited in the short-term.
We look for butter prices to open mixed.
Corn futures continued to chop within a three-week pricing range Thursday. The market firmed slightly on a weaker U.S. dollar and stronger-than-expected weekly export sales. Soybeans, which saw weaker than expected export sales, may have led the rally on thoughts of increased demand as South America dries up their sales. Brazil’s Foreign Trade Ministry reported earlier this week that October soybean exports at 1.41 million tons, down from 2.80 million tons in September but above 1.01 million tons last October. The South American soybean crop has a bigger window for exports this year but should soon run out.
Corn sales were 24.5 million bushels, up from 13.2 million bushels last week. Traders had 23.6 million bushels for the high side of the guess. Weekly soybean export sales were lukewarm at 7.7 million bushels on the week, while wheat export sales came in at 11.8 million bushels, lower than expectations.
Overnight grain prices were very quiet with mixed prices, corn was down 1 to 3 cents beans 1 lower to 1 higher and wheat steady to 3 lower. By this morning little has changed with no clear direction to the grains or the outside markets.
We look for corn to open mixed from -2 to +2, beans to open mixed from -1 to +3, meal to open steady to 1 higher, and wheat to open 1 to 3 higher.
Daily CME spot market prices:
Block cheese $1.8375 (up 4 ½ cents)
Barrel cheese $1.860 (up 4 cents)