OPENING CALLS:
| Class III Milk Futures: | 2 to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 4 to 6 Higher |
| Soybean Futures: | 3 to 5 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 10 to 12 Higher |
MILK:
Trading in milk futures was active overnight with Class III contracts through December showing activity. Traders are expected to remain cautious ahead of spot trading now that the block cheese price reached the high of May 6. The level holds no specific influence other than the fact that the price fell substantially thereafter in May. The USDA will release the June Milk Production report Wednesday. I estimate milk production to be 2.2% higher than a year ago and cow numbers to be 4,000 head higher than May. If there was any significant impact from hot weather, it will not show up until the July report to be released in August.
CHEESE:
Cheese prices have increased steadily and significantly over the past weeks. Buyers have been more aggressive in the spot market as they look ahead to upcoming demand and want to increase their supplies at lower prices rather than take a chance on higher prices later in the year. Traders will exercise caution as the market generally declines faster than it gains, but the time of year may minimize any price weakness.
BUTTER:
The butter price has been struggling. The weakness has been somewhat of a surprise due to cream supplies tightening and churn schedules reduced to five days a week. Retail demand is steady. Seasonal buying has not yet surfaced to support the price. There is an expectation that this may increase next month. Manufacturers continue to sell butter to manage the build of inventory at the plant level.
