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

Class III and cheese futures markets traded mixed favoring the slightly higher side yesterday. This trade was once again on light volume lending little credence toward future dependability of strength despite the increasing emergence of an oversold technical formation.  Dry whey markets showed solid volume but little price change as only the front three months saw movement from up to down a half cent. Dry whey markets/prices seem to be at a standstill.

Weekly NDPSR prices were announced at $1.7552 for the block down 2.22 cents from the previous week. Barrels were announced at $1.7709 up 0.88 cents and dry whey was announced at 57.42 cents up 0.62 cents.

While class III and cheese were quiet overnight we’d look for a lower open in sentiment with weaker outside markets. We expect a mixed open for dry whey.

Spot Session Results

Block cheese: $1.725 (unchanged)

Barrel cheese: $1.7500 (down 1 cent)

Grade A NFDM:  $1.7025 (unchanged)

 Butter: $1.5075 (down 2.25 cents)

It was a very strong day for grain futures as upside momentum built throughout the day and spilled over into the close. New crop prices were on fire as Informa acreage estimates were released and technical momentum carried both corn and soybeans to 20 cent gains. December corn finished the day up 20 cents to $5.7050, right up against resistance levels with old highs we’ve failed at reaching since early February. July corn failed to fully partake in the rally up just 9 cents to $6.8225, as some continued spread liquidation likely drove that price differential.

November beans finished the day up 21 cents to $13.1075 while July was up 12.25 cents to $15.2300. A warmer pattern is set to hit the Midwest in the next week. Some suggestion from forecasters that this could be a longer lasting warm weather outlook may have also helped drive the grain rally. Those of us in the central Midwest would greatly welcome the warm weather as it should allow the corn crop to rapidly play catch up in its early season development and perhaps improve the crop rating.

Informa estimates below (mostly in line with expectations):

Corn 95.3 million vs. USDA 97.3
Soybeans 77.8 million vs. USDA 77.1

Despite recent strength the grains partook in the across the board sell off overnight as well. We look for corn to open 5 to 10 lower and soybeans 10 to 15 lower.

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