OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 2 to 5 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENNG CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 5 to 7 Lower |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 1 to 3 Higher |
MILK:
The pressure on nearby Class III milk futures may be short-lived if cheese prices hold or increase Wednesday. Some selling pressure continued overnight as traders wanted to take advantage of the higher prices. There is a growing consensus that the milk supply may tighten and there could be further tightening of supply over the next few months. The futures market showed higher prices are expected in 2025 contracts, which was reflected in Tuesday's trade. Higher milk prices will be welcomed but may negatively impact demand over time. Farms will increase production if possible. However, replacements are high-priced and difficult to find. Feed prices will be reasonable this year as a large crop is projected to be harvested and prices continue to decline. This may keep more cows in the herd.
CHEESE:
Cheese prices seem to be supported with little downside expected if there is any weakness. Buyers are purchasing for upcoming contracted orders and potential fill-in demand over the next few months. Lower inventory and reduced cheese output due to mover milk moving to bottling will keep the milk supply limited and spot milk prices increasing.
BUTTER:
The butter price is only 7 cents from the high of 2022 and continues to move closer to the record high last year. Butter inventory is higher than a year ago, but the decline in inventory in July was significant and increases the potential for inventory to move closer to year-earlier levels. Further strength could be seen Wednesday.
