OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Higher |
| Soybean Futures: | 4 to 6 Higher |
| Soybean Meal Futures: | $1 to $3 Lower |
| Wheat Futures: | 8 to 11 Lower |
MILK:
Milk production is at seasonally low levels and should increase over the coming weeks. Milk supply has tightened in some areas as demand for fluid milk is strong and manufacturers are trying to increase production for upcoming demand. There currently is no shortage of milk. Those who are looking for extra milk to process find spot milk at prices even with class to as much as $1.00 over class. Orders are being placed earlier than usual as end users want to give extra time for orders to be filled and in place when they need product. USDA will release the Quarterly Grain Stocks report Friday morning, which may provide some direction to grain prices. This will not directly impact milk futures, but it may show a trend for grain prices. The August Agricultural Prices report will be released Friday afternoon and will provide the average prices for the month used in calculating income over feed for the Dairy Margin Coverage program. I do not expect there to be any payment again for August, but it may be very close to the $9.50 trigger level.
CHEESE:
Block cheese price continues to struggle as supply is more readily available in the country compared to barrels. Buyers have been able to procure sufficient supply of fresh cheese through regular channels rather than having to rely on the daily spot market. Plants are not holding on to cheese in the hope that price may trend higher. They want to move product due to demand concerns once holiday buying is finished. Spot prices may continue to remain choppy.
BUTTER:
Price is going nowhere as buyers and sellers are comfortable doing business at the current level. There is little downside price risk, keeping buyers actively increasing ownership. There is limited upside as the record price seen earlier seems to have been a price ceiling. High retail prices may slow demand somewhat during the rest of the year.
