OPENING CALLS:
| Class III Milk Futures: | 5 to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Higher |
| Soybean Futures: | 18 to 22 Higher |
| Soybean Meal Futures: | $2 to $4 Higher |
| Wheat Futures: | Mixed |
MILK:
Hot weather this week will impact milk output reducing milk receipts at plants. Lower milk production and reduced components will impact dairy products. However, the impact is not expected to tighten the milk supply to any great extent. The trade will be waiting for the July Milk Production report this afternoon to see the level of production compared to a year ago and the amount cow numbers may have declined since June. I estimate milk production to be 0.3 percent below a year ago and cow numbers to be down 10,000 head from June. Low milk prices and higher feed costs have likely impacted cow numbers as culling has been higher. Spot trading will impact the market ahead of the report.
CHEESE:
There is a strong potential for barrel cheese to move higher during spot trading as buyers were aggressive on Friday but found no willing sellers. This may push them to bid higher again today and might even bring other buyers in from the sidelines. Limited spot milk supply and milk moving to bottling for school accounts should provide support as less is available for manufacturing.
BUTTER:
The fallback of butter price on Friday might uncover buying interest as buyers may want to take advantage of the price decline to increase ownership of butter. Supply is sufficient for demand, but it is the time of year during which buyers are looking ahead to later demand.
