OPENING CALLS:
| Class III Milk Futures: | 7 to 12 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 10 to 12 Lower |
| Soybean Futures: | 10 to 14 Lower |
| Soybean Meal Futures: | $5 to $7 Lower |
| Wheat Futures: | 15 to 20 Lower |
MILK:
The strength of milk futures yesterday carried over into night trade with follow through buying evident. The bullishness of the June Milk Production report may provide further support as time progresses. U.S. milk production falling slightly below the previous year indicates further contraction likely took place this month. The large decrease in cow numbers from the previous month sets the stage for a potentially tighter milk supply as time progresses. Traders may look over their shoulders at what took place later in 2021 into 2022 and anticipate a similar pattern although not to the same extent. The anticipation of stronger prices has turned the market somewhat bullish. The strength yesterday improved the potential for higher milk prices. However, farms will still grapple with low milk prices as the July price is mostly factored in with the current price at $13.77 and limited change expected through the end of the contract. The Bi-annual Cattle Inventory report will be released today showing dairy cattle and heifer replacement numbers on July 1.
CHEESE:
Strong cheese buying yesterday may continue today as sellers hold back and buyers remain aggressive. The reduction of cow numbers on the milk production report may keep cheese buyers aggressive as they look to gain ownership of cheese for later demand. The period of low prices with buyers being complacent about continued strong production and plentiful supply might be over for a time. The price increase yesterday may have been overdone, but the market should remain supported.
BUTTER:
Butter is in a different posture with the current supply sufficient for demand and inventory higher than a year ago. Churning has slowed as cream supply has tightened. USDA will release the June Cold Storage report on Tuesday which could see a further increase in supply during the month.
