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

Class III contracts ended Friday mixed, with a majority of the weakness in 4Q 2014 contracts after another bearish spot session. The 1Q 2015 futures pack averaged $17.30/cwt., down 36¢ from the previous week. 

Cheese futures also finished the week mixed. The November contract tallied the greatest loss; the 1Q 2015 futures pack averaged $1.7513/lb., falling 3.44¢ for the week. 

Dry Whey futures ended the week mixed, with losses in the near-dated months and gains in the latter half of next year.  The 1Q 2015 futures pack average finished the week at 49.0167¢/lb., declining 1.325¢ week over week. 

Butter futures settled lower on Friday. The 1Q 2015 futures pack averaged $1.7360/lb. NFDM futures closed out the trading session settling between unchanged and 1.75¢ lower.  The 1Q 2015 futures pack averaged $1.34/lb., down 1.58¢ from the week prior. Class IV futures responded to the weakness in both the butter and NFDM markets. The 1Q 2015 futures pack finished at $16.75/cwt., down 15¢ week over week. 

Last week’s USDA Milk Production report was viewed as bearish versus our expectations.  September total U.S. milk production  was estimated at 16.472 billion lbs., down 1.12% from August 2014, but 4.05% higher than September 2013. 

Australia’s September milk production was estimated at 937.3 million liters, up 12.4% month over month, and marking a year-over-year increase for the month of 4.2%. Australia’s year-to-date production (July to September) is 2.8% more than the same period a year ago. 

 

Oct. 24 spot session results:

Block cheese: $2.1400 (down 1.75¢)

Barrel cheese: $1.9225 (down 6.75¢)

Grade A NFDM: $1.2450 (down 4.75¢)

Butter: $1.8100 (down 9.0¢)

 

Today's expectations:

• Class III to open steady to higher

• Cheese to open steady to higher

• Dry Whey to open mixed

• Class IV futures to open mixed

• Butter futures to open steady to higher

• NFDM futures to open mixed

 

Grain futures 

Grain markets fell of Friday as the harvest got back in full swing, with continued prospects of record yields.  December corn settled 6.75¢ lower, to $3.53 bushel, March 2015 dropped to $3.67/bushel. The November soybean contract shed 15.75¢ to close at $9.78/bushel, with the January contract fell to $9.84/bushel.

China’s Vice Premier said the country would continue to limit grain imports over the coming year to support domestic prices to benefit their farmers. China’s support price for buying domestic corn is substantially above global prices. They have also limited U.S. imports based on MIR162 issues.

 

Today’s expectation:

• Corn to open lower

• Soybeans and soybean meal to open lower

 

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