Another jump in spot cheese prices at the CME

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Editor’s note: This market commentary is provided by the Dairy Division at FCStone/Downes-O'Neill in Chicago, Ill.

The Class III futures posted mild gains despite another strong showing in an active spot cheese session. The blocks gained five cents on eight trades, while the barrels leapt 5.25 cents higher with a single trade. The Class III futures in 2012 only managed gains ranging between three and 15 cents, while out in 2013 prices settled between three lower and nine higher on a total of 1,308 trades. The fourth-quarter 2012 contracts were the strongest performers, with the Oct contract leading the way, gaining 15 cents to close out at $19.77. The fourth-quarter pack gained 12 cents to settle at $19.71. These contracts look destined to test the $20 quickly, but this level could provide a measure of resistance in the near term.   

More pre-USDA Crop Report positioning led to another volatile day in the grain markets. Prices started lower to start the day, with the Dec12 corn as much as eight lower to $7.92 ½ and the Nov12 soybeans touching $15.55 ¼, 10 ½ lower, before charging higher in the later part of the day. The Dec12 corn settled at up 16 cents to $8.16 ½, while the Nov12 beans closed out up 15 ½ to $15.81 ¼. The Dec12 wheat contract touched an intraday low of $8.83 ¾, down 19 cents at that point before driving higher into the close to settle up 10 ¾ cents at $9.13 ½. 

Expect more volatility today as market participants place their bets before the report which calls for some drastic cuts in yields.  

We look for corn to open eight to 10 cents higher and for beans to open 8 to 10 cents higher.

Daily CME spot market prices:

Block cheese: $1.85 (up 5 cents)

Barrel cheese $1.825 (up 5.25 cents)

Butter: $1.735 (up 2.5 cents)  

Grade A NFDM: $1.405 (up 0.5 cent)

These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. Commodity trading is risky and FCStone Group, Inc., INTL FCStone Inc., and their affiliates assume no liability for the use of any information contained herein. Although all information is believed to be reliable, we cannot guarantee its accuracy and completeness. Past financial results are not necessarily indicative of future performance. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. References to and discussions of exchange traded products are made solely on behalf of FCStone, LLC. References to and discussions of OTC products are made solely on behalf of INTL Hanley, LLC, and OTC products are only available to eligible counterparties.

 



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