OPENING CALLS:
| Class III Milk Futures: | 5 to 12 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | Mixed |
MILK:
Traders do not know what cash prices will do today, but there seems to be a concern that the upside may be limited. Mostly steady cash prices yesterday disappointed the trade giving the impression buyers might have reached a threshold for now. Milk production is slowing seasonally, but the extent of that slowing is uncertain. Hot weather has impacted output with another period of hot weather again in the forecast for next week. Increase culling is also having an impact, but the level of that is uncertain as replacements may limit some of the decline. USDA will release the June Milk Production report today which will show the level of culling that took place during the month. I estimate cow numbers to be down 8,000 head from May. I estimate milk production to be 0.3% above a year ago.
CHEESE:
Prices may be near a level at which it may be attractive for sellers to offer product more aggressively. Buyers may have reached a threshold for the time being as there remains sufficient supply for demand. There is no concern over supply levels. However, perception can move the market as further price increases might increase buyer interest as they want to get ahead of further price gains.
BUTTER:
Price is expected to remain supported. Churning is slowing as cream supply tightens. Demand is steady at the retail level but a little slower for the food service industry. Higher inventories will keep sufficient supply available for demand.
