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

The spot cheese market maintained its upside momentum yesterday, carrying Class III futures along with it. Only time will tell which way this market will play out, but we tend to step back at times when fundamental and technical analysis aren’t lining up. It continues to be of interest that there are multiple buyers in the spot session for both the block and barrel, as this doesn’t have the look of one group pushing an agenda, but the fact we had multiple sellers yesterday indicates there may be a little more cheese out there to satisfy these buyers.

Class IV futures were mixed but mostly higher yesterday. Convergence was the word of the day for the butter market. Spot finished 2 cents lower while futures contracts were mixed, but mostly higher. It was an interesting news day for NFDM, as yesterday’s NDPSR result lent some strength to the nearby months, while Dairy Market News reports were mostly bearish. 


June 5 spot session results:

Block cheese: $2.05 (up 2.0¢)

Barrel cheese: $1.9675 (up 2.25¢)

Grade A NFDM: $1.8600 (unchanged)

Butter: $2.2400 (down 2.0¢)


Today's expectations:

• Class III & Cheese to open mostly lower

• Dry Whey to open mixed

• Class IV, Butter & NDFM to open mixed


Grain futures

The entire grain complex traded lower yesterday as the market struggled against friendly weather, fund selling and a general “risk off” mentality. The corn market has struggled over the past couple of weeks and failed get any traction. The continued price weakness makes sense from a fundamental standpoint, as growing conditions are near ideal. However, from a technical perspective, the market is oversold and has remained in that state for some time now, without any kind of corrective bounce. The soybean market shrugged off decent export numbers.


Today’s expectation:

• Corn & Soybeans to to open steady to 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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