OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Lower |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 4 to 6 Lower |
| Soybean Futures: | 12 to 18 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 7 to 9 Lower |
MILK:
Pressure on Class III milk futures continued Thursday in response to weakness of block cheese again. Any long-term support remains elusive as milk supply is sufficient for both bottling and manufacturing. The recent decline of block cheese should have increased the desire for buyers to purchase supply for end of the year demand. However, continued price weakness keeps buyers holding out for lower price. This dims the price outlook through the rest of the year. USDA will release the July Milk Production report Thursday afternoon. I estimate milk production to be up 2.6% from a year ago and cow numbers to be down 1,000 head from June. Hot weather was prevalent during much of July, but reports continued of strong milk production despite the heat.
CHEESE:
The positive aspect of the market is that the block/barrel spread has been moving closer together. The bearish aspect is that blocks have been declining while barrels have been increasing rather than one increasing faster than the other. The weakness of blocks has been the focus of traders as they anticipate limited upside price potential of barrels.
BUTTER:
Price just continues on its merry way with limited price movement. It is possible price is developing a sideways pattern and may be breaking away from the downward channel it has been in for the past few month. Time of year should see a demand increase and a reduction of inventory.
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