OPENING CALLS:
| Class III Milk Futures: | 2 to 5 Lower |
| Class IV Milk Futures: | 4 t o 8 Lower |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Lower |
| Soybean Futures: | 3 to 5 Lower |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 1 to 2 Higher |
MILK:
The pressure on milk futures Tuesday will keep traders cautious ahead of spot trading Wednesday. Futures prices continue to roll down in Class III contracts as the underlying cash prices provide little reason for traders to be bullish. Strong milk output and the expectations for it to continue leave limited expectations for higher prices. It will be up to the impact of the weather this summer on milk output, potentially tightening the milk supply. However, with increasing cow numbers lower production per cow may still keep milk production higher than a year ago. However, advancements have been made to limit the impact of hot weather on cow comfort.
CHEESE:
The block price falling below the trading range may keep buyers unaggressive with the anticipation of cheese continuing to be offered on the market. They see no need to be aggressive, as a sufficient supply will be available as long as milk production remains strong. Currently, it seems that it would take a black swan event to change the market.
BUTTER:
The decline in butter on Tuesday renewed the possibility of the price revisiting the previous low. The weakness over the past week in nonfat dry milk is concerning, as the price may have reached resistance, and demand has been impacted. If this weakness continues, Class IV futures will trend lower.
