OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Lower |
| Soybean Futures: | 4 to 7 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 6 to 9 Lower |
MILK:
September Class III milk futures initially traded higher overnight but fell back 31 cents from Thursday's close in the early morning. Hopefully, price will not remain that low as the morning progresses. But it does indicate there may be limited desire by traders to buy the weakness in anticipation of a market rebound. Without support from underlying cash, there is little reason for the market to trend higher. Milk supply remains sufficient for demand, even though hot weather has had an impact on production and components. There remains another month of potential impact on milk production due to weather. However, if overall demand remains slower, then a decline of milk supply will not have much impact on the market.
CHEESE:
Cheese output increased in June according to the Dairy Products report released Thursday. What is interesting is that cheese output was higher, but the June Cold Storage report showed inventory declining, compared to the previous month. This would indicate good demand, but the market does not seem to reflect that. Buyers had purchased a significant amount of cheese earlier in the year, leaving them less aggressive now. As long as sellers continue to offer cheese on the spot market at lower prices, buyers will hold back.
BUTTER:
Price continues to hold strong despite the weakness of nonfat dry milk. Price will reach a level at which demand will slow. Both retail and food service industry demand are reported to have slowed, but buyers remain interested in buying. There could be some pullback from buyers as butter production in June was higher rather the expected lower output.
