OPENING CALLS:
| Class III Milk Futures: | 10 to 20 Higher |
| Class IV Milk Futures: | 5 to 8 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 5 to 6 Lower |
| Soybean Meal Futures: | $0.50 to $1 Lower |
| Wheat Futures: | 1 to 2 Lower |
MILK:
The June Cold Storage report was neutral and may not provide much support to the market. However, Class III milk futures show double-digit gains overnight, possibly due to the market being oversold. The July Cattle Inventory report did not show anything to move the market one way or the other. The only positive aspect of the inventory report was that the ratio of milk replacement heifers to milk cows is historically low. However, that is offset by increased cow numbers. Much of the movement in milk futures is likely traders trying to outguess and scalp the market for some profit.
CHEESE:
The American cheese inventory and the total cheese inventory are nearly at the same level as a year ago. The first five months of this year showed inventories below a year ago. Inventory generally increases during the first half of the year. There is concern that this could continue into the second half of the year due to strong milk production.
BUTTER:
The inventory of butter is 6% below a year ago, but that has not been able to support the market. Slower domestic demand and steady butter production keep supply available. Reduced churning as some plants opt to sell cream at the current higher prices may have some impact on the market, but the upside potential might be limited.
