Learn Russian: Да, там вода и молоко. - Yes, there is water and milk there.

It answers a simple yes/no question. In Russian, you can turn a statement into a question just by raising the pitch of your voice. Someone likely asked Там вода и молоко? by raising their tone on the items, and this sentence answers it starting with Да.

The English translation says 'there is', but I don't see a word for 'is' in the Russian sentence. Why?

That is because Russian completely drops the verb 'to be' in the present tense. You literally just say Да, там вода и молоко (Yes, there water and milk). The 'is' is automatically understood from the context.

Why do the words вода and молоко sound like they have the letter 'a' in them when spoken?

This is because the Russian letter о only makes a clear 'oh' sound when it is stressed. When it is unstressed, it is pronounced more like 'ah'. In вода, the stress is on the last syllable, so it sounds like va-DA. In молоко, the stress is on the final о, so it sounds like ma-la-KO.

Does the word там translate directly to the English phrase 'there is'?

No, там specifically means 'there' as in a physical location (over there). English uses the phrase 'there is' just to state that something exists, but in Russian, you only include там when you are actually talking about where something is located.