OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 2 to 10 Higher |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 2 to 4 Higher |
MILK:
There is not much market excitement to generate significant volatility. The increase in spot cheese prices supported Class III futures on Tuesday, but did not generate significant buying interest or short covering. Traders are not heavily long or short in futures, leaving any reaction to price changes in underlying cash limited. Traders continue to trade short-term in an attempt to take a small profit if their guess is correct. The dairy herd continues to increase and will keep sufficient milk available to the market even though hot weather will impact milk output.
CHEESE:
The bounce in spot cheese prices on Tuesday was welcomed, but it did not trigger aggressive buying interest in the futures maket. Follow-through buying did not take place in the overnight market. Traders remain cautious over the potential of prices. The market will need to prove itself before traders turn bullish. The substantial decline in the cheddar cheese price during the GDT auction on Tuesday does not provide support for the market.
BUTTER:
Cream supplies have declined, but the market has not tightened. End users are not concerned over supplies. Sellers continue to offer significant volumes of butter to the spot market. This will limit the increase in inventory, but supply should remain sufficient for demand.
