OPENING CALLS:
| Class III Milk Futures: | 4 to 6 Lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 8 to 10 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 1 to 2 Higher |
MILK:
Class III milk futures had quite a swing on Tuesday as higher cheese prices pushed contracts higher before selling pressure eventually moved futures lower. After the CME settlement for the day, contracts fell into negative territory as concern over price potential surfaced if USDA's estimates for milk production come to fruition. The estimate for this year was raised by 900 million pounds from the July estimate to a total of 229.2 billion pounds. If realized, it would be an increase of 3.3 billion pounds over 2024. The estimate for 2026 milk output was raised by 1.3 billion pounds from July to reach 230.4 billion pounds. This would keep the supply of milk sufficient for demand unless demand increases significantly. This may limit the upside potential for prices.
CHEESE:
Cheese prices have increased substantially over the past few weeks, improving the outlook for milk prices. The block cheese price is now only 7.50 cents from the high set on June 2, before the price fell substantially. The barrel price is only a penny from the high reached on the same day.
BUTTER:
Butter has moved in the opposite direction with the price 6.50 cents from the low set on May 29, before the price rallied into early July. Continued strong butter production and lower demand than a year ago have put the market in a bearish position.
