OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 7 to 9 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 5 to 7 Higher |
MILK:
Nearby Class III milk futures closed higher Tuesday in response to higher cheese prices. However, the gains did not follow the increase of cheese as traders retain a negative attitude. Some of that was due to the 7.4% decline of the Global Dairy Trade auction trade weighted average Tuesday. However, the event showed a gain in cheddar cheese price of 5.8%. Nevertheless, traders remain cautious as spot cheese prices have made a substantial gain since the low was established and there is concern the market could see a significant retracement. The July Milk Production report will be released Monday which will provide further direction depending on cow numbers and milk production compared to a year earlier.
CHEESE:
Cheese production will be slowing a bit as more milk is moving to deficit areas to fill school accounts. This is not expected to tighten supply as there is sufficient inventory. It may cause buyers of cheese to be more aggressive as they look ahead to upcoming demand. The key to price strength will be demand for fresh cheese as that is what is traded on the daily spot market.
BUTTER:
Butter output is slowing as cream has tightened. Improving demand may reduce inventory to a similar level to a year ago over the next few months. Buyers are not concerned over a shortage but are buying to prepare for upcoming demand.
