Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.

Class III futures started the trading session freefalling in a sea of red for a second consecutive day. However, the extreme losses were short-lived, despite a 3.25¢ drop in the spot barrel price, widening the block-barrel spread to 10¢. The question is whether or not the behavior of the past few sessions might be indicating a change in trend. Markets generally act ahead of the news curve, and with upticks in production being realized in California, Utah and Idaho, coupled with near idyllic weather conditions in New Mexico and Arizona, spring flush is off to a good start.

Class IV futures closed in the red yesterday across nearly all of 2014. Fundamentally, the bullish aspects that drove this market higher haven’t changed. International demand is still strong and there are buyers who have been priced out of the market for quite some time who will be anxious buyers on price weakness. Despite an unchanged spot session, NFDM futures reacted to the soft GDT results and closed lower throughout 2014. Spot butter session saw no trading activity for a second day in a row.

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March 4 spot session results:

Block cheese: $2.2275 (unchanged)

Barrel cheese: $2.1275 (down 3.25¢)

Grade A NFDM:  $2.0275 (unchanged)

Butter: $1.88 (unchanged)


Today's expectations:

• Class III & Cheese to open soft

• Dry Whey to open lower

• Class IV, Butter & NFDM to open slightly lower


Grain futures

The grain market continued to post gains on the heels of Ukrainian unrest, fund buying and brisk export interest.


Today’s expectation:

• Grain complex to open slightly soft


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