OPENING CALLS:
| Class III Milk Futures: | 10 to 30 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Lower |
| Soybean Futures: | 12 to 14 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 2 to 4 Lower |
MILK:
Class III milk futures are overdone to the downside and should be corrected somewhat Tuesday. Of course, the correction will be dictated by the underlying cash. Prices may be low enough to garner buyer interest in the spot cheese market and trigger greater buying interest in milk futures. The August contract will move accordingly, but with reduced volatility due to more than half of the pricing for the contract being anticipated by the trade. The June Dairy Products report released Monday does not have much influence on the market, but it does indicate why inventory is at the current levels. Class IV futures have been immune to the volatility of Class III futures due to greater stability in butter and nonfat dry milk prices.
CHEESE:
The block cheese price is at the bottom of its range which may increase the buying interest of end users. Buyers have not seen the need to be aggressive in the spot market as they see sufficient supply for current and expected demand. Cheese production is steady with spot milk available but at steady to higher prices.
BUTTER:
The butter price is content to remain in a sideways pattern with current output in line with demand. There is sufficient inventory to make up for any shortfall as demand increases seasonally. The cream supply is tighter with cream prices higher, but have been generally steady over the past few weeks. Buyers have been purchasing supplies for later in the year without much fanfare.
