Wednesday Morning Dairy Market Update - Demand Remains in Focus

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Steady to 5 Lower
Butter Futures:	Steady to 1 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	7 to 10 Lower
Soybean Meal Futures:	Steady to $1 Higher
Wheat Futures:	10 to 12 Higher

MILK:

The pressure on milk futures did not carry over during the night session. Traders are pondering whether the market may have found a bottom or if further downside is possible. Underlying cash may move in a sideways pattern as buyers and sellers accomplish business. A price retracement would be in order; however, this is not a usual market and usual patterns are not necessarily followed. Bottling and manufacturing plants are running as full as they want to be due to ongoing logistical issues and the lack of employees. Trading activity is expected to be limited prior to spot trading as traders will see whether the market was overdone to the downside Tuesday.

CHEESE:

Lower cheese prices may be around for a time as the market tries to move product during a time of high food prices. The Consumer Price Index will be released Wednesday for the month of June. Expectations are for an increase to 8.8%. Generally, two consecutive months over 8% would signal a recession. However, some believe inflation has peaked with this report taken in stride. However, demand may continue to be impacted.

BUTTER:

Price should remain near the $3.00 level for the near term and possible for an extended period. Overall demand remains good, keeping inventory from gaining on year ago levels. Production is balanced with demand. Cream remains available, keeping churns satisfied.