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

Class III futures closed out the week’s trade with a bearish performance.  The May through December 2014 contracts pushed lower by 5¢ to 46¢. The third quarter futures pack average slipped 20¢ lower Friday to settle for the week $20.04/cwt., 8¢ lower week over week.

USDA’s World Ag Supply & demand Estimates report released Friday morning estimated 2014 total milk production at 206.1 billion lbs., up 2.44% year over year, while 2015 total production was pegged at 212.1 billion lbs. The 2014 Class III average price was predicted to reach $20.70/cwt.; the 2015 average was projected at just $17.40/cwt. 

Cash-settled cheese futures ended Friday’s trading session under duress. 

Whey futures settled between unchanged and 0.8500¢ higher.

NFDM futures bucked the overall bearish trend of the dairy complex, finishing the week mostly higher. Butter futures pushed lower to end the week despite another bullish spot session. 

Declines in the butter futures complex outweighed the strength of the NFDM, leading to bearish price action for Class IV futures.  The third quarter futures pack average fell 5¢ on Friday to settle at the price of $21.36/cwt., while slipping a total of 4 cents lower week over week. 


May 9 spot session results:

Block cheese: $2.0450 (unchanged)

Barrel cheese: $2.0200 (down 3.25¢)

Grade A NFDM: $1.7800 (down 0.75¢)

Butter: $2.1675 (up 1.25¢)


Today's expectations:

• Class III & Cheese futures to open lower

• Dry Whey to open soft

• Class IV to open steady

• Butter to open slightly higher

• NFDM to open lower 


Grain futures

Grain markets finished last week with divergent price action after USDA’s WASDE report, as corn moved lower and soybeans pushed higher.


Today’s expectation:

• Corn to open soft

• Soybeans to open soft

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


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.