OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 5 to 8 Lower |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $3 to $5 Higher |
| Wheat Futures: | 14 to 18 Lower |
MILK:
The pressure on milk futures Tuesday was a surprise. However, considering most of the pressure took place in later contracts on very light trade, it is likely those contracts may rebound to some extent. Spot cheese prices could go either way after the stability of Tuesday with no trading activity. Sellers may hold off, anticipating the buying frenzy has not yet run its course. The June Cold Storage report was neutral with overall cheese stocks increasing from May and remaining about even with last year. Butter stocks declined but remained higher than a year ago. Hot weather is impacting milk production, which will reduce output and milk receipts at the plant level. This should tighten milk supply and likely eliminate the discounts for spot milk that have been prevalent for an extended period of time.
CHEESE:
Prices took a breather Tuesday as buyers and sellers held off waiting to see who was going to make the first move. Nothing happened so traders may be cautious ahead of spot trading. It seems the market ran up too far, too fast, but it might have been held down too long and the large correction moved price near the level it should be. Inventory has not increased very much this year.
BUTTER:
Butter has not seen the same strength as cheese but is slowly plodding higher. The inventory is higher than a year ago with sufficient supply available for demand. Slower churning due to tighter cream supply may result in reduced inventory if demand remains steady.
