OPENING CALLS:
| Class III Milk Futures: | 10 to 20 Lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Higher |
| Soybean Futures: | 5 to 7 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | Mixed |
MILK:
Futures liquidation continued in overnight trading with unusually high volume. The August and September Class III contracts showed the most activity and the greatest pressure. These contracts have lost nearly $1.00 per cwt since the close Tuesday. If cheese prices stabilize or trade higher Thursday or Friday, futures could regain all losses. This volatility will continue and may increase as the summer progresses. The nation's corn crop is rated 75% good to excellent, one of the highest initial ratings. The drought has been eliminated in much of the country which may result in a large crop with lower prices. This should keep milk production strong. Higher milk prices and lower feed prices will improve margins.
CHEESE:
Cheese prices weakened Wednesday, but may have limited downside as inventory is not above a year ago and demand is beginning to improve. Any price declines may be short-lived for the time being. However, with more milk available for the vat, more cheese should be produced possibly keeping up with demand growth.
BUTTER:
The butter price may see further weakness as buyers step back from the market, anticipating further aggressive selling interest. The selling pressure may be limited as buyers will take advantage of the lower prices. Churning is active with plants wanting to build as much inventory as possible by utilizing the available cream.
