Dairy markets: Last week in review

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

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¢)

 

Today's expectations:

• 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 futures

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.

 

Today’s expectation:

• Corn to open higher

• Soybeans to open higher

 

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.



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


RX7320

When moving hay to feed dairy cows, farmers are seeking a versatile tractor. KITOI’s new Tier 4 RX series tractors ... Read More

View all Products in this segment

View All Buyers Guides

)
Feedback Form
Leads to Insight