OPENING CALLS:
| Class III Milk Futures: | Steady to 8 Lower |
| Class IV Milk Futures: | Steady to 5 lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 4 to 6 Lower |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | Steady to $1 Higher |
| Wheat Futures: | 4 to 6 Lower |
MILK:
The recent weakness of Class III futures moved the market to close at the lowest level in a month in the July contract. Traders had hoped cheese prices would find support, but so far that has been elusive. The market is trying to balance current supply with demand and demand will be difficult to predict as the year progresses and high prices impact consumer spending. Milk production is being impacted by the current hot weather with the extent of that impact yet to be seen. Milk production is steady across much of the country at the present time. Traders remain optimistic, but not quite as strongly as they had been a month ago.
CHEESE:
Both block and barrel cheese prices have declined to the lowest level since March 30. This is a concern for price potential the rest of the year. Buyers of cheese tend to turn more aggressive at this time of year as they look ahead to later demand. However, this year they had been looking ahead and purchasing supply well in advance of the usual time. Now they are assessing whether they need to buy much more at this time or hold back and purchase at lower prices.
BUTTER:
Butter price bounced again Tuesday, but it may be difficult to move above the $3.00 level. The substantial increase of the U.S. dollar recently may have an impact on exports. However, tighter world supply may override that impact. Steady to lower production may keep price supported. Price is expected to be choppy.
