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: | 1 to 2 Higher |
| Soybean Futures: | 2 to 4 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 2 to 4 Higher |
MILK:
Further strength in Class III milk futures Tuesday could move prices back to the levels they were a week ago. Buyers in the underlying cash market are looking ahead to demand late this year and are interested in purchasing on any price weakness or before prices move higher. There is sufficient milk available for demand but there is concern over the decrease in production during the summer. There is also optimism over demand as there are indications it is improving. The current futures market indicates better prices than anticipated a few months ago, encouraging increased milk production. Culling has slowed with higher milk prices providing the incentive to purchase high-priced heifers.
CHEESE:
Cheese prices are expected to show further strength as buyers may become more aggressive. There is little concern over supply as more milk moves to processing. However, increasing demand with the inventory at levels similar to a year ago might result in a greater supply decline through the end of the year.
BUTTER:
Butter price is expected to chop around as buyers and sellers accomplish business. The cream supply is beginning to tighten, reducing butter output. The industry has prepared for this with increasing inventory. Seasonally, inventory declines during the second half of the year and could decline rapidly if international demand improves.
