OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 4 to 6 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 1 to 3 Higher |
MILK:
Milk futures should remain supported, but how much further they increase will be up to demand and buying interest in the spot market. Cheese buyers do not seem to want to bid higher for supply. However, reduced milk production and increased bottling demand for school systems may reduce availability and result in the necessity to pay higher prices. The seasonal decline in milk production due to weather may be at an end. However, milk output will not increase anytime soon and is expected to remain below a year ago through the rest of the year. USDA will release the June Milk Production report Wednesday afternoon. I estimate milk production to be 1.1% below a year ago. I estimate cow numbers to be up 2,000 head from June.
CHEESE:
Barrel cheese is in a tighter supply position than blocks, which should keep the barrel price higher. The demand for fresh cheese may increase as buyers look ahead to fall and holiday demand. This may keep them aggressive in the spot market as they want to increase ownership. Cheese prices are expected to remain supported unless demand does not improve as anticipated.
BUTTER:
The dip in the butter price Tuesday was a surprise but it does not change the trend. Butter is not in a tight supply as inventory is greater than a year ago. However, the price should remain supported and trend higher over the next few months. Churning has slowed due to a tighter cream supply. Inventory should decline during the rest of the year as stocks are used to supplement fresh production.
