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

Class III continued its move higher yesterday, with 2014 futures contracts settling anywhere from +5¢ to + 26¢. 1H  2015 contracts held steady, with some strength out in the deferred months. 

Both blocks and barrels gained on the day, setting new recent highs.  Neither blocks or barrels have seen these levels since April 30. In the last 15 sessions, barrels have gained nearly 20¢, while blocks have gained nearly 15¢.

A slight seasonal slowdown in production,  in conjunction with soon-to-start new school year demand,  seems to be supporting the market . This bump seems as though it may be a bit overdone, and we should expect to see some weakness as exports slow and the end of grilling season comes upon us

Temperatures continue to be at or near normal for most of the Midwest, with the West Coast experiencing intermittent heat events. Weather in Oceania continues to be a non-factor. 

Butter futures saw significant gains on the day. Spot butter has been quite active, with 22 trades occurring over the last two days.  Class IV saw a bit of strength in the nearby months, but this was tempered by a relatively flat NFDM market.  Stocks remain tight and prices remain uncompetitive internationally.


August 12 spot session results:

Block cheese: $2.11000 (up 2.0¢)

Barrel cheese: $2.1500 (up 1.5¢)

Grade A NFDM: $1.5200 (down 2.0¢)

Butter: $2.4300 (up 2.0¢)


Today's expectations:

• Class III to open mixed, mostly lower in nearby months

, Cheese futures to open mixed

• Dry Whey to open steady

• Class IV & Butter to open quietly

• NFDM to open mixed


Grain futures 

Grain prices had an interesting session, with yesterday's USDA reports coming out a bit bearish for soybeans, but bullish for corn. Prices traded sharply lower prior to the report, and then stabilized following the report’s release. The biggest surprise was corn yield, coming in at 167.4 bushels/acre, well below  trade expectations.   

Today’s expectation:

• Grains to open steady to higher


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