OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Higher |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 10 to 15 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 5 to 7 Lower |
MILK:
Class III milk futures found strength from the increase in cheese prices Monday. The increase was a bit more than expected due to traders being very cautious over any increase of underlying cash. Futures may have a difficult time moving much higher unless further gains are seen in underlying cash. There is sufficient milk supply available for both bottling and manufacturing. More milk is moving to school systems but there are still sufficient supplies for manufacturing. Trading activity may be subdued until spot trading provides further direction.
CHEESE:
The increase of cheese in inventory for the month of July was not what we would like to see. It is not unusual to see as increase of cheese from June to July, but it does not provide much support to prices. The weather was hot in July, but it did not have much impact on milk production. Cheese production remained strong without sufficient demand to absorb the production. The report may keep a lid on price potential.
BUTTER:
Butter inventory declined in July, providing some hope for stronger prices later this year. Inventory is now 7% above a year ago with the potential for declines bringing inventory more in line with a year ago. Strong demand and lower output is beginning to have an impact.
