OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 3 to 5 Higher |
| Soybean Meal Futures: | $0.50 to $1 Higher |
| Wheat Futures: | 1 to 3 Higher |
MILK:
Milk futures took a beating on Wednesday as traders reacted to the bearish milk production report. The underlying cash cheese prices held steady, but dry whey declined, adding to the negativity. Butter fell to a two-month low, pressuring Class IV futures. The liquidation may have run its course with some traders buying into the market in anticipation that it is overdone to the downside. Continued strong milk production will assure a sufficient supply of milk. This may keep milk prices low throughout the rest of the year. USDA will release the June Livestock Slaughter report this afternoon, which is expected to show lower dairy cattle slaughter for the month.
CHEESE:
It is uncertain whether cheese prices will find support as prices have held steady over the past days. The buyers and sellers have not been aggressive, potentially indicating the market is balanced. Even if cheese prices increase, the upside may be limited as sufficient milk is available for manufacturing.
BUTTER:
The weakness of butter keeps buyers unaggressive and willing to wait for lower prices before purchasing more supply. The low price will keep U.S. butter competitive on the world market. This will result in continued strong exports. Domestic demand is steady overall.
