OPENING CALLS:
| Class III Milk Futures: | 4 to 8 lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 8 to 14 Lower |
| Soybean Futures: | 15 to 20 Lower |
| Soybean Meal Futures: | $2 to $5 Lower |
| Wheat Futures: | 4 to 7 Lower |
MILK:
July Class III futures have fallen nearly $2.00 over the past two weeks. Again, the market falls faster than it increases. Cheese prices have taken a hit as buyers are not aggressive. Traders had been holding hope and were optimistic reduced milk production would further tighten supply and higher prices would remain with potentially even higher prices to develop. That still may happen, but the concern over demand in the current market environment is not providing support to underlying cash. USDA will release the May Milk Production report Tuesday afternoon, providing their calendar is correct. Most often they will not release a report the day after a holiday, but we will go with their calendar. I estimate milk production to be 1% below a year ago with cow numbers steady with last month.
CHEESE:
Cheese prices have fallen to the lowest level since March 17 as buyers have not been very aggressive in the market. An amount of cheese has already been purchased for the third and even fourth quarter this year as buyers had been concerned over supply. With the potential for slowing demand due to inflation, they may not need to be very aggressive for a period of time. Lower prices may be needed to keep product moving.
BUTTER:
Price has been holding well as both domestic and international demand has been strong. However, it seems the $3.00 level is price resistance. Demand may be slowing as inflation is having an impact on restaurant traffic. There has also been a little slowing of retail demand, but with inventory substantially lower than a year ago, price should remain supported.
