OPENING CALLS:
| Class III Milk Futures: | 5 t0 10 Higher |
| Class IV Milk Futures: | 5 to 15 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | 4 to 10 Higher |
| Soybean Meal Futures: | $1 to $3 Higher |
| Wheat Futures: | 6 to 8 Higher |
MILK:
The rise of milk futures has been impressive since the beginning of July. Support for increasing underlying cash prices has provided the catalyst to generate aggressive buying. Traders were reluctant during the initial gains of cheese prices as the market needed to prove that the uptrend was real. The weakness of dry whey also subdued the impact of rising cheese prices. However, that has changed as both cheese and dry whey are increasing. A similar situation was true for Class IV futures as butter and nonfat dry milk seem to now be trending higher. August through December Class III futures ae now solidly above $18.00 again.
CHEESE:
Cheese buyers are in the market to increase ownership at the best price they can before it moves higher. Even though prices have been increasing, they still remain reasonable for buyers to purchase for upcoming demand. More aggressive buying now may limit price potential later, but the gains will translate over into better milk prices. Demand remains strong with sufficient supply to meet that demand.
BUTTER:
Price is keeping pace with cheese and may remain that way as there is general buying taking place in the cash market. The fact that cream supply is tightening may support butter price as churning activity may slow a bit. This certainly does not mean butter supply will tighten anytime soon or if at all, but it may limit the amount moving to inventory. Seasonally, we should see inventory begin to decline at this time of year.
