Dairy markets: Barrels roll; Class III futures climb

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

What a difference a day makes. Class III futures settled double-digit higher, with May leading the charge to settle up 30¢, and the remainder of 2014 displaying some strength, setting anywhere from +6¢ to +28¢. Cheddar blocks and barrels supported the firm tone, with blocks up 1¢, and barrels up an impressive 11.5¢. With cheese plants running at capacity, we expect yesterday’s activity to be indicative of choppy market action around $2.20/lb., rather then a renewal of the type of bullish activity that brought us over $2.30/lb. earlier in the year. Dry whey futures settled anywhere from unchanged to +1.5¢. The July through December pack is trading at 57.55¢/lb. There is little new fundamental news, and the 2H 2014 pack has been trading in a sideways pattern since mid-February.

NFDM futures settled the day mixed, while butter futures saw a bit of strength. Domestic demand seems to be decent, and these high prices have buyers buying hand to mouth.

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

 

March 5 spot session results:

Block cheese: $2.2375 (up 1.0¢)

Barrel cheese: $2.2425 (up 11.5¢)

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 markets had a quiet day as tensions cooled between Russia and Ukraine. Wheat and corn complexes settled down, with soybeans put up a mixed board. Focus is slowly starting to shift back to the U.S., as farmers start to plot planting intentions. There is still more than 50% snow cover in the lower 48 states, and freezing temperatures persist throughout a majority of the Corn Belt. USDA released a statement that there were cancellations of 9 million bushels of U.S. soybeans. Though this is not a huge volume, it is still noteworthy.

 

Today’s expectation:

• Grain complex to open slightly soft

 

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