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

Class III futures ended last week’s trade on a strong note. The 2Q 2014 futures pack average jumped 49¢ on Friday to settle at $21.13/cwt., while adding a total of 63¢ week over week. 

With the spring flush already underway in the Western U.S., and the Midwest about to set in, the question becomes how long can this bullish trend continue in the near term?

For the week ending March 1, dairy cow slaughter under federal inspection increased by 2,800 head (4.8%) week over week, to 61,200 head. The year-to-date slaughter now totals 531,200 head, 8.5% lower than during the same period last year. 

Cash-settled cheese futures finished last week on a bullish note. The 2Q 2014 futures pack closed out the week at $2.0550/lb., up 4.3¢ on the day and gaining 5.83¢ week over week. 

The Class IV 2Q 2014 futures pack fell 8¢ on Friday to settle at $22.37/cwt., yet posted a week-over-week gain of 11¢. NFDM futures closed the week bearish. Butter futures finished Friday’s trading session mixed, with near-term weakness countered by strength in the final four contract months of the year.

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


March 14 spot session results:

Block cheese: $2.3625 (up 1.25¢)

Barrel cheese: $2.2625 (down 1.25¢)

Grade A NFDM:  $2.04 (unchanged)

Butter: $1.88 (down 0.5¢)


Today's expectations:

• Class III to open sharply higher

• Cheese to open higher

• Dry Whey to open steady to higher

• Class IV to open mixed

• Butter to open slightly lower

• NFDM to open steady to higher


Grain futures

Grain markets closed out last week’s trade mixed, as the marketplace looked to the impact of the Crimea referendum vote to add volatility to the marketplace.


Today’s expectation:

• Grain complex to open lower


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.