Barrel cheese slips a penny on 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.

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)

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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