Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
If no one has issued a “small craft advisory” for the Class III futures market yet, someone should. The market looked technically poised to break out to the upside, and yesterday’s action certainly supported that sentiment. After a 0.9% uptick on the GDT auction and a spot cheese session that saw blocks gain 3¢ and barrels pick up 2.75¢, Class III futures went nuclear. The July contract put in a fresh high and closed limit up, at $21.79/cwt.; August spiked up 70¢, to $21.48/cwt., and solid gains were seen throughout the balance of 2014 and spilled over into 2015. The market will look to today’s USDA Milk Production report for direction, but the past couple of sessions have reignited bullishness in what has been a relatively stable market since the beginning of June.
Class IV resumed its upside momentum by tacking on gains from July 2014 out to January 2015, on the heels of impressive strength coming out of the butter market. Following an active spot session that saw 18 loads of butter trade and a 1¢ uptick, the futures market continued to tack on gains and soar to fresh contract highs. NFDM futures saw mixed trade following an unchanged spot session.
June 17 spot session results:
Block cheese: $2.0500 (up 3.0¢)
Barrel cheese: $1.9875 (up 2.75¢)
Grade A NFDM: $1.8250 (unchanged)
Butter: $2.1950 (up 1.0¢)
• Class III, Cheese & Dry Whey to open mixed
• NFDM to open mixed
• Class IV & Butter to open soft
The grain market continued to shed value yesterday, with double-digit losses in the soybean market, and December corn flirting with contract lows. July corn continued its slide to the downside.
• Grains to open slightly higher
FC Stone's annual two-day Dairy Outlook Conference begins today in Chicago. Visit www.intlfcstone.com/events for information.
The trading of derivatives such as futures, options, and swaps may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand those risks prior to trading. Any reference to past performance is not indicative of future results. All references to futures/options trading are made solely on behalf of FCStone, LLC. All references to swap execution and bi-lateral swaps are made solely on behalf of INTL Hanley, LLC. FCStone, LLC will clear swaps when applicable. Swaps are only available to eligible counterparties. All observations of economic, political and/or market conditions are not intended to refer to any particular trading strategy, promotional element or quality of service provided by INTL FCStone Inc. and its subsidiaries and should be construed as market commentary. All recommendations to buy or sell a specific derivative or forecasting statements regarding market activity and the pricing thereof should be construed as a solicitation in any jurisdiction in where such an offer or solicitation would be legal. Proper context and guidance including but not limited to the particular trading objectives, financial situations and the needs of the intended audience were taken into consideration when this recommendation was prepared. Contact your account representative for specific advice to meet your specific trading preferences or goals. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by INTL FCStone Inc. and its subsidiaries. Sources of information believed to reliable were used in preparing such observations, and no guarantee or representation regarding the accuracy of those sources has been made. INTL FCStone Inc. and its subsidiaries are not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material.