Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
The 4Q 2014 Class III futures pack averaged $19.47/cwt. at the close of trading last Friday.
The spot barrel market shed 4.5¢ to pull back below the block price, approaching a more historic spread, and below the key psychological $2/lb. mark. The spot market remains range bound, with no major breakout moves to the up or downside. That explains in large part why futures didn’t collapse.
Butter futures broke from their recent bullish trend, as sellers stepped into the spot market, cutting 3¢ from the spot butter price. The 4Q 2014 butter futures pack average declined to finish the week at $2.01/lb., while tallying a week over week total gain of 7.2¢.
Class IV futures succumbed to the bearish price action of the component markets, with August through October contracts bearing the brunt of the selling pressure. The 4Q 2014 futures pack averaged $20.03/cwt., increasing 13¢ week over week.
July 25 spot session results:
Block cheese: $1.9700 (down 1.75¢)
Barrel cheese: $1.9525 (down 4.5¢)
Grade A NFDM: $1.6750 (unchanged)
Butter: $2.5900 (down 3.0¢)
• Class III & Cheese & Dry Whey to open soft
• Dry whey to open steady
• NFDM to open soft
• Class IV to open steady
• Butter to open firm
Grain markets ended the week with a bullish, or at least bouncing tone, as lingering concerns surrounding the Ukraine/Russia tensions overcame the continual prospects for a significant U.S. crop. Crop yields are still predicted to come in at record levels, as a Reuters poll of 20 analysts pegged the corn crop yield at an averaged yield of 170.476 bushels per acre, while the soybean yield was estimated to reach 45.548 bushels per acre, both projections above the current USDA figures.
• Corn to open higher
• Soybeans to open higher
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