OPENING CALLS:
| Class III Milk Futures: | 4 to 6 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 1 to 3 Higher |
MILK:
Class III milk futures were under pressure on Tuesday despite the increase in cheese prices. Traders are uncertain about the increase in demand as the summer progresses. Seasonal strength has yet to be seen. Overnight trading activity points to higher futures as traders may liquidate their short positions and take a chance on a rebound in prices. Dairy exports for cheese and butter were strong in May as prices remain competitive on the world market and international demand is improving. Lower milk prices have not impacted milk output as producers are maintaining or increasing milk production to provide cash flow.
CHEESE:
Cheese prices should be improving as buying interest generally increases in preparation for later demand. However, it may be difficult for prices to rise under the current market environment. Demand is good, but not good enough to tighten the supply.
BUTTER:
The butter price slipped after establishing an eight-month high but is not expected to retrace very much. The cream supply has decreased, and production of Class II products has increased. International demand is strong with domestic demand steady. There are some indications that retail demand is beginning to improve. This should continue to support the market.
