Editor’s note: This market commentary is provided by the Dairy Division at FCStone/Downes-O’Neill in Chicago, Ill.
Class III futures opened the week with a light volume trade as the holidays near. Prices were mixed throughout the day, but finished higher ultimately when the spot cheese market saw blocks close unchanged and the barrels move half a cent higher, though no trades occurred on the day. The market continues to carry a moderate premium to the current spot pricing as it seems market sentiment is for a moderate bounce on spot prices as we move through the holiday season. Futures finished the day 2 to 12 higher with December through September 2013 getting a little push from cash cheese futures and some support from the dry whey market.
Grains had a mixed start to the week as bullish bean fundamentals tugged on corn and wheat to slightly higher pricing overnight and into early Monday with soybeans up double digits. Things turned to the downside early Monday, however. as bearish fundamentals pushed corn and wheat prices to the downside moving beans off their highs. Corn prices in the Gulf are still carrying a premium to the South American markets, keeping export sales slow. And wetter weather is forecast for the U.S., which allowed for the weakness on corn and wheat to move the market a bit lower on the day. Corn finished down 6.75 cents at 724; beans up ¼ cent in Jan at 727.5 while down 3.25 in March to 1488.25, and wheat off by 6 cents to 808.
We look for corn to open 3 to 6 cents lower and soybeans from 15 to 20 lower.
Block cheese: $1.725 (unchanged)
Barrel cheese $1.63 (up 0.5 cent)
Grade A NFDM: $1.5575 (unchanged)
Butter: $1.57 (down 2.5 cents)
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.