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

Class III futures continued to rally. We’d not be surprised to see a little profit taking today ahead of the milk production report this afternoon. The dry whey market was silent yesterday. Cheese futures moved higher in sympathy with Class III.

The Class IV market continues to be the leader, as NFDM prices once again were on fire to the upside. The NFDM market closed limit higher from April through December 2014 as the market continues to absorb the news of heavy sales into both Algeria and Mexico in recent days. Indications are prices support is strong at the $2.05 level, and that has deferred futures playing catch up. While most everything else was higher on the day, the butter market was mostly lower. Perhaps Friday’s cold storage report will offer something in terms of direction.

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

Feb. 19 spot session results:

Block cheese: $2.1075 (unchanged)

Barrel cheese: $2.0675 (unchanged)

Grade A NFDM:  $2.0425 (up 1.25¢)

Butter: $1.77 (unchanged)


Today's expectations:

• Class III & Cheese to open firm

• Dry whey to open mixed

• Class IV to open soft

• Butter to open soft

• NFDM to open higher


Grain futures

It was a day of swings in the grain markets, with soybeans opening to double-digit gains only to trade to near double-digit losses, ultimately closing down. Meal likewise experienced some big swings, ultimately closing lower. Corn and wheat made up a little ground on beans. Corn continues to find fund buying, with the continued strong demand being seen for exports and ethanol usage likely creating a tighter-than-expected supply and demand  projection. Soybeans are seeing some farmer selling, putting pressure on the marketplace as well as a dollar discount on South American beans. We’re still looking at a very tight carryout for this year and strong basis levels leaving the market to likely move more sideways in the coming weeks.


Today’s expectation:

• Grains to open mixed


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.