OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 4 to 7 Higher |
| Soybean Meal Futures: | Steady to $1 Higher |
| Wheat Futures: | 3 to 5 Higher |
MILK:
The July Milk Production report was neutral, providing little direction for the market to trade. Not much activity in futures is expected prior to spot trading. USDA announced $350 million in additional assistance payments due to the impact of COVID-19. The payments are aimed to reimburse farmers for 80% of the revenue difference per month and will be based on annual production of up to 5 million pounds of milk marketed from July through December of 2020. USDA says the payment rate will vary by region based on the actual losses on pooled milk related to price volatility.
USDA will also make improvements to the Dairy Margin Coverage safety net program, updating the feed cost formula to better reflect the actual cost dairy farmers pay for high quality alfalfa. This change will be retroactive to January 2020 and is expected to provide additional retroactive payments of about $100 million for 2020 and 2021. More information will be release over time.
CHEESE:
Buyers still have not stepped up, even though block cheese price has declined each day this week, losing 8.25 cents. The pressure on blocks pulled barrels down Thursday, but the loss was limited. Traders will look ahead to the July Cold Storage report that will be released Monday to see whether inventory is declining seasonally.
BUTTER:
Price is trying to turn higher and seems to have broken the downtrend it has been in since mid-April, but it may be difficult for price to realize much upside potential anytime soon. Current production is satisfying demand with limited inventory being needed to fill orders. Price may be establishing a sideways trading pattern.
