Dairy markets: ADPI conference may provide direction

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

Last night marked the start of the annual American Dairy Products Institute (ADPI) conference, which we think may prove to be a turning point for the marketplace over the next 30-90 days. Chatter ahead of the event has been all over the place, with talk of the international market undercutting cheese exports, and even talk of cheese being imported into the U.S.

On the other side of the coin, milk production hasn’t picked up to the extent most of the marketplace expected, and thus many are feeling as though we just simply don’t have enough production to really move the market lower.

Friday Class III futures closed mixed. The 3Q 2014 pack tacked on 61¢ on the week to close at $19.93/cwt. The cheese futures market was mostly higher on Friday, with only May closing lower. As with most dairy markets last week, the 3Q 2014 pack saw significant gains. Dry whey prices finished out the week steady to higher. 

The butter market finished the week with strength across the board. The Class IV market was mixed, with the Q3 2014 pack posting a more significant increase.

April 25 spot session results:

Block cheese: $2.21 (unchanged)

Barrel cheese: $2.1800 (unchanged)

Grade A NFDM: $1.81 (down 4.75¢)

Butter: $1.91 (up 1.5¢)

 

Today's expectations:

• Class III & Cheese to open lower

• Butter to open higher

• Class IV & NFDM to open slightly lower 

 

Grain futures

Grain futures closed the week with continued strength, as rains are anticipated for much of the Corn Belt from this morning through midweek. Planting progress will be released this afternoon with expectations somewhere 20-25% completed ahead of the weather-driven slowdown.  

Friday’s settlements saw corn up 5.5¢ in July at $5.1275; and December corn up 3.5¢ at $5.0625. July beans wereup 24.25¢ at $14.9425,  as the old/new crop spreads corrected sharply, with November up just 8.75¢, at $12.3975.

 

Today’s expectation:

• Corn to open higher

• Soybeans to open sharply higher

 

FC Stone's annual Dairy Outlook Conference will be held June 18-19, in Chicago. Visit www.intlfcstone.com/events for information.

 

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