Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
Class III futures opened weak, rebounded temporarily higher, but the gains didn’t hold. At settlement, April led the way to the downside, shedding 30¢, while May followed suit with a break of 6¢. The second and third quarters posted gains.
Spot cheese prices moved higher, but there were no trades. We would expect to see some cheese brought to the spot market in short order, or this recent two-day correction where April has widened the gap vs. the spot equivalent is going to have to correct.
Dry whey futures were mixed, but mostly higher, particularly the deferred contracts.
Class IV futures pulled back after the recent rally, with the largest declines seen in the nearby months. The forward curve is continuing to flatten, and while the recent tenders from Mexico and Algeria were likely responsible for most of the move, some dryness in New Zealand must be on the markets radar.
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Feb. 26 spot session results:
Block cheese: $2.2150 (up 2.5¢)
Barrel cheese: $2.20 (up 2.25¢)
Grade A NFDM: $2.03 (down 4.0¢)
Butter: $1.78 (down 1.5¢)
• Class III, Cheese futures to open firm
• Dry Whey to open soft
• Class IV futures to open firm
• Butter to open higher
• NFDM to open soft
Beans took the reins after the open, climbing over 9¢ in the front months as basis and strong export interest, as well as some concern about the South American crop, pushed markets the $14.00/bushel hump. After it was all said and done, March corn finished down a quarter cent. Direction today will likely be determined by the export sales report due out later this morning.
• Corn futures to open lower
• Soybeans and meal to open modestly higher
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