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

The selling pressure dominating last week’s trade took pause on Friday, as Class III futures closed out the week on a more stable tone. With the exception of the June contract, all months through the balance of 2014 managed to close in the green, albeit the gains were modest and on less-than-convincing volume.

At this stage in the game, the market has reached a momentary state of equilibrium. The market is quiet – eerily quiet. This is not likely to persist, and it’s more of a question as to who jumps first to determine where we’re headed next.

From a production standpoint, the slower-than-anticipated Midwestern flush has counterbalanced the strong and early flush experienced out West. That said, milk availability is mixed. Granted, there have been recent upticks in Midwestern volumes that have helped to alleviate recent tightness and, weather permitting, should translate into better milk production numbers in the near future. This should also help to clarify market direction in the coming months as both international and domestic demand levels have cooled, which should translate into a rebuilding of the drawdown on stocks we have seen.

USDA’s monthly Milk Production report is released this afternoon, May 19.


May 16 spot session results:

Block cheese: $1.9975 (unchanged)

Barrel cheese: $1.9600 (unchanged)

Grade A NFDM: $1.7850 (up 0.25¢)

Butter: $2.1600 (unchanged)


Today's expectations:

• Class III to open steady to 15¢ lower

• Cheese futures to open steady to 1¢ lower

• Dry Whey to open mixed

• Class IV to open steady

• Butter to open mixed

• NFDM to open steady 


Grain futures

The grains traded mixed into the close on Friday, on rather tepid volume and price action that a friend of mine in the business referred to it as “like watching a glacier move.” Old-crop corn and soybeans both shed value; however, new crop contracts posted gains. With planting season window narrowing with every passing day, the margin for delay will become increasingly less tolerable. The corn market will look to Monday’s planting progress report for direction, yet the trade is already pricing in strong week-over-week results.     .


Today’s expectation:

• Corn to open lower

• Soybeans to open steady to higher

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

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