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

Class III markets got off to a stronger start on the heels of Wednesday’s bullish Cold Storage report, but the Cheese spot market brought a big turnaround. Spot butter (-9¢) exacerbated the losses.

Cheddar blocks pushed down a staggering 21.25¢, correcting the spread vs. barrels, which were down 8¢. As of settlement yesterday, the spot market equivalent would peg Class III near $21.75/cwt., a massive one-day decline of around $2.25 from the day prior. With the market just entering into November pricing due to the 5-week month in October, it allowed for a sharp decline on futures there.

Moving forward, the question seems to be much less about will we continue to move lower, but at what point will buyers be willing to step in to both re-fill inventories and load up for the pending holiday demand. When you’re dealing with massive price swings like we’ve seen in the cheese and butter markets of late, that is an extremely tough number to peg.

NFDM prices were mixed. Class IV futures were lower.

 

Oct. 23 spot session results:

Block cheese: $2.1575 (down 21.75¢)

Barrel cheese: $1.9900 (down 8.0¢)

Grade A NFDM: $1.2975 (down 1.75)

Butter: $1.9000 (down 9.0¢)

 

Today's expectations:

• Class III to open lower

• Cheese to open steady to lower

• Dry Whey to open steady

• Class IV futures to open steady

• Butter futures to open steady to lower

• NFDM futures to open steady to lower

 

Grain futures 

The soybean market led the charge on Turnaround Thursday, springing to the upside with export sales a little stronger than expected. China was the biggest buyer, although purchases were in smaller Increments and not reported by USDA (purchases of less than 100,000 bushels do not have to be reported to USDA, implying China bought in increments to sneak it under the radar).

Both corn and soybeans could have some room to run.

 

Today’s expectation:

• Corn & Soybeans to open higher

 

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