OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Higher |
| Class IV Milk Futures: | 5 to 8 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Lower |
| Soybean Futures: | 4 to 8 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 4 to 6 Higher |
MILK:
Milk futures finally made a nice bounce Thursday. This was not from stronger cheese prices, but from the record one-day rise of dry whey price. Traders will be cautious over becoming too excited about a change in trend. The pattern has been that any price increases in the underlying cash market have been short-lived. This will be treated the same unless proven otherwise. There is growing concern over the impact of drought on dairy farms and milk production in those areas that have received little rain this year, and we have not even finished summer or harvested corn and soybeans yet. Escalating feed prices will only get worse as the year progresses in those areas. Other areas have plentiful supply of feed, leaving them in a strong position to maintain milk production. The impact on overall milk output will be determined over time. Milk futures should see some cautious follow-through buying before spot trading. Then it will be anyone's guess as to direction.
CHEESE:
Cheese prices continue to struggle as buyers remain unaggressive due to plentiful supplies. Demand is good, but orders are being filled easily without having to bid up for supply. It is the time of year during which buyers turn their attention to fall and holiday demand. This should increase buying interest. However, when supply is readily available, they see no need to be concerned and wait for sellers to offer at steady or lower prices.
BUTTER:
Price bounced again Thursday, but it was not able to recover the loss of the previous two days. This keep the downtrend intact for the time being. Butter production has slowed, but inventory continues to increase. Ice cream production is beginning to decline, which will leave more cream available to the churn. That may result in further production increases.
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