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

Class III futures settled anywhere from unchanged to -16¢ in 2014; 2015 contracts settled anywhere from +4¢ to -5¢. Both blocks and barrels were steady. The block-barrel cheese price spread is 7.25¢, outside the historical range of 3¢-5¢.

While we are currently moving sideways, it’s important to remember that choppy trade generally precedes a directional move. The directional move we are expecting would tend to lean to the upside right now. However, one should not expect to see us head to the races tomorrow.  Short term, you can expect the choppiness to continue as the fundamental picture sharpens.  However, don’t be surprised if we test or break through yearly highs in the summer months.

Butter, like Class III, has moved sideways for the better part of June.  Exports have been strong with domestic demand supportive as well.  NFDM seems to be chopping along in the nearby months. However, yesterday we saw red across the board, with the largest moves in the 4Q 2014.


June 12 spot session results:

Block cheese: $2.03 (unchanged)

Barrel cheese: $1.9675 (unchanged)

Grade A NFDM: $1.8575 (unchanged)

Butter: $2.1850 (unchanged)


Today's expectations:

• Class III, Cheese to open steady/firm

• Dry Whey to open slightly lower

• Class IV, NDFM & Butter to open mixed


Grain futures

Corn moved slightly higher yesterday despite the sharp move lower in soybeans.  While the fundamental news remains mostly negative for corn, the market appears technically oversold.  We expect there is potential for  a rather significant bounce on corn prices in the coming weeks as traders question longer-term weather for pollination.


Today’s expectation:

• Corn & Soybeans to open firm

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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