OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 3 to 4 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 2 to 3 Higher |
MILK:
Traders seem to embrace bearishness more readily than bullishness. The steady cheese prices and the slight decline of dry whey on Tuesday triggered aggressive selling in Class III futures. Class IV futures were lower, but that stands to reason due to the weakness of butter. The market will need to prove itself before traders will turn bullish. The hope is that the market will find stability and then increase seasonally. Even with milk futures at the current levels, farmers will keep stalls full and push production. Cow numbers are anticipated to increase as the high heifer prices are being paid and culling remains slower than a year ago.
CHEESE:
The current supply of cheese is sufficient for demand and may keep a lid on the upside price potential for the time being. Cheese manufacturing remains steady at a higher level after schools closed for the summer. Cheese buyers will purchase at lower prices but may remain unaggressive unless there is an increase in demand requiring them to increase ownership.
BUTTER:
There has been quite a bit of cash activity so far this week. Sellers are moving supplies to limit the inventory at the plant level. Lower prices keep buyers active as they purchase what is offered to increase ownership and protect against higher prices later in the year. This should limit downside risk.
