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

Class III futures closed out last week’s trade on a strong note. The 2Q 2014 futures pack average gained 42¢ Friday to settle the week at $22.05/cwt., 92¢ higher week-over-week. 

 Cash-settled cheese futures ended Friday’s trading session with a strong bullish surge to higher prices. The 2Q 2014 futures pack closed out the week at $2.1367/lb., 3.84¢ higher for the day while adding a total of 8.17¢ week-over-week. The 2Q 2014 dry whey futures pack average finished the week at 64.7833¢/lb., gaining 1.425¢ week-over-week.  

The results of the Milk Production Report for the month of February released last Wednesday were considered neutral in our opinion when compared to our expectations. The results of the Cold Storage Report were considered bullish versus our expectations for the cheese market.  Cheese inventories were estimated below our expectations to post another month-over-month decline, yet the rate of the drawdowns has eased as demand has slowed for some cheeses.

The Class IV 2Q 2014 futures pack average gained 2¢ on Friday to settle at  $22.47/cwt., adding 10¢ week over week. The 2Q 2014 butter futures pack average jumped 1.209¢ higher on Friday to finish the week at $1.87, climbing 3.7¢ week over week. 

The results of the Cold Storage Report were considered bullish versus our expectations, as the butter inventories estimate fell below our forecast.  Butter stocks were reported down 31.33% year-over-year, while 19.67% higher month-over-month.  The month-over-month build was typical for this time of year, though below pre-report forecasts, underpinning the notion that manufacturers continue to divert resources to the production of exportable butter rather than that for domestic consumption. 

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


March 21 spot session results:

Block cheese: $2.4275 (unchanged)

Barrel cheese: $2.31 (up 1.0¢)

Grade A NFDM:  $2.05 (up 1.0¢)

Butter: $1.92 (up 1.0¢)


Today's expectations:

• Class III to open higher

• Cheese to open higher

• Dry Whey to open steady

• Class IV to open higher

• Butter to open firm

• NFDM to open firm


Grain futures

Grain markets finished out the week with mostly negative price action, led lower by the weakness in the soybean markets amid rumors of China canceling 10-16 cargoes of Brazilian beans.


Today’s expectation:

• Grain complex to open higher


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