Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
Near-term Class III futures traded lower, with the Q2 2014 pack settling at $19.87/cwt. The April contract took the largest loss on the day, down 59¢. H2 2014 contracts were mixed for the most part, down 3¢, to $18.96/cwt. While the move was more towards the downside, it will take more than one session to prove this is an overall change in trend. Cash Blocks settled up, but the Barrel market was offered down 4¢. Cash cheese futures responded in kind. Cheese production could be increasing from more available milk in many parts of the country. Whey markets were very quiet.
The Q2 2014 Class IV market had the most action – along with the largest losses on the day – settling at $22.10/cwt. Weakness in both Butter futures and NFDM led the Class IV down. Today’s trade will let us know if we are in a correction phase, or a trend change. Spot butter trading went unchanged, leaving the futures market undecided.
FC Stone's annual Dairy Outlook Conference will be held June 18-19, in Chicago. Visit www.intlfcstone.com/events for information.
March 3 spot session results:
Block cheese: $2.225 (up 0.5¢)
Barrel cheese: $2.20 (down 4.0¢)
Grade A NFDM: $2.04 (down 1.25¢)
Butter: $1.88 (unchanged)
• Class III & Cheese to open lower
• Dry Whey to open steady
• Dry Whey to open soft
• Class IV, Butter & NFDM to open slightly lower
Grains were wild yesterday on the back of Ukrainian situation. The wheat market took off, and corn and beans followed, despite a higher U.S. Dollar and much higher crude oil prices. Corn futures eventually gave up a good portion of the gains. Weekly export inspections were friendly to the rally. Soybeans on the other hand, found little or no support to keep prices elevated into the close, with export inspections below the same time last year.
• Corn to open lower
• Soybeans to open mixed
• Soybean meal 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.