OPENING CALLS:
| Class III Milk Futures: | 2 to 5 Higher |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 2 to 3 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 2 to 4 Lower |
MILK:
Stronger butter and cheese prices supported the market Wednesday. This may carry over into Thursday ahead of spot trading with the anticipation of further gains. Traders will be cautious in Class III futures as the inability of cheese prices to hold the highs during spot trading may indicate buyers have reached a threshold. Milk production continues to run below a year ago. However, there is sufficient milk available for demand. In a few weeks, more milk will begin to be diverted to bottling as they prepare for the upcoming school year. This will tighten the milk supply available for manufacturing. At the same time, demand for manufactured dairy products should begin to increase as the industry prepares for fall and holiday demand. USDA will release the June Livestock Slaughter report Thursday, which is expected to show dairy cattle slaughter below a year ago.
CHEESE:
Cheese inventory has not exceeded the previous year and is not expected to be higher on the June Cold Storage report released Thursday afternoon. This could further support the market. Inventory could decline more rapidly if demand follows the usual pattern. If milk production remains below a year ago, manufacturing supplies might tighten supporting higher prices.
BUTTER:
Butter inventory is expected to be higher than a year ago on the June Cold Storage report. However, that may not have much influence on the market as inventory should decline seasonally during the second half of the year. Retail butter demand has slowed recently but is expected to increase from now through the end of the year.
