OPENING CALLS:
| Class III Milk Futures: | 8 to 12 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 Lower |
| Wheat Futures: | 3 to 4 Higher |
MILK:
Class III milk futures have been in a strong uptrend since July 6 in response to increasing cheese prices. Futures have moved back to the highest levels since late May. Class III futures are now above Class IV futures. This has been a rarity over the past four years. There has not been a significant shift in market fundamentals. Buyers have turned their attention to upcoming seasonal demand and have been willing to purchase cheese more aggressively to increase their ownership of supplies. The decrease in milk production has reduced the overall supply of milk, but has not caused a shortage. Some spot milk remains available at a discount to class. The June Milk Production report will be released next week and is expected to show continued strong milk output as well as increased cow numbers.
CHEESE:
Cheese buyers have been active in the spot market, but not aggressive. Prices have been increasing, but not by leaps and bounds. Buyers do not seem to be concerned about the availability of supply, but seem more interested in purchasing steadily to avoid the risk of higher prices down the road.
BUTTER:
Butter has not been able to find solid footing. The price of butter below the cheese price is unusual and has been seen very few times over the past years. Reduced butter production may eventually tighten the market and support the price as demand improves through the end of the year.
