OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 4 to 6 Lower |
| Soybean Futures: | 7 to 9 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 7 to 9 Lower |
MILK:
The bearishness of the April Milk Production report may already be factored in after the decline in milk futures over the past week. However, the trend of higher milk production and higher cow numbers continues. This will limit the upside potential for milk prices for the time being. It is uncertain how much more the nation's dairy herd will increase, but it may take some time for the trend to slow. High calf prices are a large driver behind the increase in cow numbers. The result of higher cow numbers is greater milk production. Underlying cash has not been able to find support, and the recent weakness in nonfat dry milk indicates the top of that market has been reached. Overnight trading has been unusually active. May shows over 200 contracts, June over 300 contracts, and July over 100 contracts traded.
CHEESE:
The recent weakness in cheese may not be finished. Even though inventory is slightly below a year ago, there is sufficient supply for demand. Cheese production is increasing as schools close for the summer. Cheese production will not overwhelm the market, as inventory has not exceeded that of a year ago. However, plants want to move supplies quickly to reduce inventory at the plant level.
BUTTER:
There is uncertainty surrounding the butter market. The price has fallen substantially, but it is uncertain whether the market has found support. Sellers continue to move supplies at whatever price they can to keep them from building at the plant level. Churning remains active as cream supplies remain ample
