OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 5 to 7 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 5 to 7 Lower |
MILK:
The selling pressure on milk futures was not as great as it could have been. Traders seem to be reluctant to press the market to the downside. Lower prices and time of year could limit downside price potential. However, with production running slightly above a year ago and inventory 5% higher than a year ago, it is uncertain how low milk prices could go. Strong corn prices due to the impact of variable weather on the crop could provide support in the larger picture, but not in the immediate future. Milk production is likely near its low point with increases likely seen over time. USDA will release the July Livestock Slaughter report Thursday, which contains dairy cattle slaughter for the month.
CHEESE:
Block cheese price moving below the previous low, putting price back to the lowest level since January, was certainly not friendly to the market. Sellers continue to offer product to the market as inventory continues to build. Buyers are purchasing but do not need to be as aggressive due to the availability of supply. Less milk being available for manufacturing due to increased bottling for schools could reduce supply over time.
BUTTER:
Price much over $3.00 seems to be a buyer resistance level. Price could move back into the range below $3.00 again Thursday. Demand is good with inventory lower, but higher prices may limit consumer buying. A report Wednesday indicated there are 20 million households that are struggling to pay their energy bills due to the high prices of everything. This may have an impact on dairy demand as we move to the winter months.
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