OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady 5 Higher |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 3 Lower |
| Soybean Futures: | 2 to 5 Lower |
| Soybean Meal Futures: | Steady to $1 Lower |
| Wheat Futures: | 6 to 9 Lower |
MILK:
Class III milk futures moved higher early Tuesday, but buyer interest ran its course when spot barrel price failed to increase. This normally would not have been bearish, but that is not the case in the current market environment. Traders have been accustomed to limited price strength on account of underlying cash price increases being short-lived. The Milk Production report showed strong milk production even during a month of record hot weather. The Cold Storage report showed increasing cheese stocks. This did not paint a picture of higher prices anytime soon. Class III milk futures show prices in the $17.00 range throughout the next year and a half.
CHEESE:
Buyers of cheese are looking ahead to end-of-year demand and are purchasing supplies accordingly. The problem is they are able to purchase those supplies without having to be aggressive on the spot market. This leaves prices fluctuating daily as business is being accomplished on an as-needed basis and at reasonable prices.
BUTTER:
The trend in butter may be turning higher. However, there is no reason to believe buyers will become very aggressive. Lower inventory in July is a good sign demand is exceeding production. This may reduce inventory and support further price strength.
