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

Nearby Class III and cheese futures contracts rallied hard from the start Sunday night and only gained steam as the trading session rolled into and out of the spot session. Some bullish help came from the CME margin changes which seem to have caused some short covering (buying of previously sold futures contracts). Class IV price is now a 71¢ discount to the Class III price in April. We don’t see this as sustainable. Midwest milk production is coming back on line.

Blocks are tight and should remain tight for the next couple weeks. Barrels are no loosey goosey either. The spread is the key factor. The fact that the spread keeps correcting with barrels doing the upside work ignites the bullish buying of futures. This will probably be short-lived; in April we will more than likely see the block come down off its highs.  

NFDM spot broke and futures were soft alongside it, meaning that even with butter spot and futures price increase, Class IV was kept in check. NFDM looks topped out. Spot NFDM should break hard within the next four weeks. Butter is firming amidst global fat needs, but reality is Passover and Easter demand is about to meet up with the ghost of Christmas past.  

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


March 25 spot session results:

Block cheese: $2.4325 (up 0.5¢)

Barrel cheese: $2.3775 (up 6.75¢)

Grade A NFDM:  $2.0150 (down 3.5¢)

Butter: $1.9450 (up 2.5¢)


Today's expectations:

• Class III, Cheese to have short-lived soft open

• Dry Whey to open steady

• Class IV, NDFM to open soft

• Butter to open firm


Grain futures

Grain markets rallied after early losses on Ukraine concerns that just won’t go gently into that good night. Putin is a force to reckon with and while that might hold some bearishness to equity markets, it has the opposite effect on the grains.


Today’s expectation:

• Grain complex to open soft


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