Dairy markets: Mostly bearish ending to last week

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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.

 

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