OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 5 to 7 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 15 to 20 Higher |
MILK:
Strong futures were a welcomed sight after the large decline seen over the past month. Overnight futures showed further gains for today. Further support will be needed from underlying cash, or the rebound may be short-lived. Milk production is generally following a seasonal path with production declining. Even with slowing production there remains sufficient milk supply for both manufacturing and bottling. BAM weather released a map indicating a strong chance for a potentially large heat dome in mid-July that will affect the Midwest and Northeast. The duration of this heat dome is unclear but could have a significant impact on milk production.
CHEESE:
Cheese demand remains strong for the export market but is slowing slightly in the domestic market. Whether one will offset the other is yet to be seen. Reduced milk receipts to manufacturing plants have still resulted in inventory growth which is not a good sign for price strength. Buyers have just not been aggressive even though prices are low. Spot prices are not expected to move much today.
BUTTER:
Price is expected to remain range bound. However, with more indication that both retail and food service demand is slowing, price could move to establish a lower trading range. Export demand has been strong but could decline as the last Global Dairy Trade auction indicated a significant price decline on the world market. The auction price was $2.56 per pound compared to the current spot price of $2.94 per pound.
