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

Class III trading volume remained moderate on slight price pressure as just 914 contracts exchanged hands on Wednesday. The lead futures contract of January gave up nearly all of Tuesday’s gains as the barrel price slipped another quiet penny. 

Demand for cheese isn’t gone, but the sense of urgency left the building at the beginning of November. And because the holiday buying spree is on hiatus, we’re left to talk about surpluses in milk and soft prices for cheese in the country. But these discussions are common in the murky demand waters of mid-December. So, we look for a choppy trade to start today and expect that the next move for spot cheese is one to adjust the now 11-cent spread.

In the grain complex, Wednesday’s session saw some interesting volatility, but ultimately not very large price movements on the day. Overnight prices were mostly lower, led by soybeans being down double digits, but prices recovered in the early morning hours and ultimately closed down 0.75 cents in March at 1470.5.

The soybean meal market continues to pull soybean prices back toward unchanged as they finished the day up 3.9 in Jan back above the 450 mark. Corn traded mixed throughout the day ― at one point falling nearly 10 cents only to rally back and close down just 2.5 cents at 725.5. Short term, we may again be rounding a minor bottom in corn as we are near the lower end of the long respected trading range. 

We look for corn to open 1 to 4 cents lower and soybeans from -2 to +2.

Block cheese: $1.76 (unchanged)

Barrel cheese $1.65 (down 1 cent)

Grade A NFDM: $1.5575 (unchanged)

Butter: $1.595 (unchanged)

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