OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 1 to 3 Higher |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 3 to 5 Higher |
MILK:
Class III futures have traded higher again overnight as traders feel somewhat confident that cheese prices may increase further. Even though milk production is higher than last year, the increase has been slowing, possibly setting a trend of reducing milk production as time progresses and milk prices remain near current levels. However, if milk prices improve, it is likely cow numbers will again increase along with milk production. Milk production has passed the seasonal low and is improving in most areas. Silage has been harvested with soybean and grain corn harvest under way in many places. Yields will vary widely, but overall supplies are estimated to be better than earlier thought. USDA will release the Quarterly Grain Stocks report Thursday which is likely to have an impact on grain market with the report expected to be somewhat friendly. The August Agricultural Prices report will also be released providing prices used in the calculation of income over feed and payments that will be received under the Dairy Margin Coverage program.
CHEESE:
Block cheese price is knocking on the door of the upper end of the prominent sideways trading range. Last time price was at this level, Class III futures fell back in anticipation of cheese prices weakening. However, stronger overnight trading activity in milk futures indicates traders may believe price will be able to break out of the range potentially setting a higher trend. Increased buying for holiday needs may make this happen.
BUTTER:
Even though butter demand is increasing at the retail level and exports have been strong, it has not yet been enough to provide continued strong support to the market. Churning is active, but not enough to fulfill demand without using inventory to supplement fresh supply.
