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

The Class III futures market began the day mixed, but a continued push from spot cheese buyers meant Class III was quickly off to fresh highs. September through December 2014 volume was very strong, finishing the day 28¢ to 44¢ higher. 2015 contracts finished mixed, but mostly higher.

It’s hard to say when this spot cheese runaway train will be stopped, but we’ve heard rumors of cheese is headed into the United States, as well as a pushback on U.S. exports. September 2014 through January 2015 Class III vs. Class IV spreads now carry more than a $1.00/cwt. premium, so expect to see more fresh milk making its way into the Class III stream in the coming weeks.

 Cheese futures were higher, in line with Class III, but saw slightly lower volume. Whey futures remain relatively quiet.

NFDM prices traded to a higher close yesterday, as the spot market fell below $1.30/lb., but recovered to finish unchanged. Class IV futures traded mostly lower on the day, following butter, despite continued gains seen in the NFDM futures contracts. 

 

August 26 spot session results:

Block cheese: $2.2900 (up 2.5¢)

Barrel cheese: $2.3000 (up 4.0¢)

Grade A NFDM: $1.3000 (unchanged)

Butter: $2.7550 (down 2.50¢)

 

Today's expectations:

• Class III to open slightly lower

• Cheese to open mixed

• Dry Whey to open steady

• Class IV to open mixed

• NFDM to open higher

• Butter to open mixed

 

Grain futures 

Grain prices had a relatively quiet session, finishing with a mixed close. September soybeans continue to get pummeled. Corn has challenged recent lows and recovered, perhaps setting the stage a moderate rally.

 

Today’s expectation:

• Corn to open steady to lower

• Soybeans to open higher

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