OPENING CALLS:
| Class III Milk Futures: | 5 to 15 Lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 3 Lower |
| Soybean Futures: | 6 to 9 Higher |
| Soybean Meal Futures: | $3 to $5 Higher |
| Wheat Futures: | 12 to 15 Higher |
MILK:
The pressure on milk futures continued with a vengeance yesterday and looks like follow-through pressure may continue today. Class III futures falling back to the levels last seen in February is not a good sign. The market should have a bounce soon unless cash prices remain under pressure. Traders have turned bearish with the focus being on demand through the rest of the year. Sufficient milk supply remains available for both bottling and manufacturing. Growing inventory of cheese should leave sufficient supply available for an increase in seasonal demand later in the year. Overall weather has been good for milk production. The good/excellent condition of the corn crop deteriorated 3% last week with the condition now at 64%. The soybean crop condition declined 2% to now being 63% good/excellent. Further deterioration could begin to establish support under the grain markets.
CHEESE:
The price action yesterday in spot cheese would suggest further weakness is possible today. Buyers remain unaggressive due to the concern over ongoing demand. Growing inventory with lower milk production indicates slower demand. Cheese buyers had already purchased some cheese ahead of time in fear of tightening milk supply. That leaves them less aggressive at the present time.
BUTTER:
There seems to be price resistance at the $3.00 level. However, the market is supported with buyers remaining interested in purchasing in the price range of $2.90 to $3.00. The significant decline of nonfat dry milk yesterday is a concern and could set the stage for further pressure on Class IV prices. Nonfat has fallen back to the lowest level since May 18.
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