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

Class III futures moved slightly higher in response to the gains posted within the spot session yesterday, with the October through December contracts finishing the day between unchanged and 18 cents higher. The penny gain in the blocks and penny-and-a-half increase in the barrels did little to inspire follow-through buying in the 2013 contracts, as the January contract gained just 3 cents while February added two. 

Two consecutive days of gains in the spot markets have done little to reinvigorate the market bulls after what was recently perceived as the slightly bearish cold storage and milk production reports. With the peak demand season quickly approaching, end-users should help to support the Class III and other dairy futures as they look to fill their pipelines ahead of the predicted holiday rush.

The grain complex had a choppy trading session yesterday as prices moved higher in the morning, receded midday, then pushed back higher into the close. The Dec12 corn posted a loss of 1 ½ cents to close out at $7.54 ½, while the Nov12 soybean contract was the big winner on the day, gaining 17 ¼ cents to settle at $15.70 ½. The Dec12 wheat was a close second, gaining 15 ¼ cents to settle at $8.84. The buying interest was conjured up by continually strong export demand for the soybeans mixed with some weather related concerns out of South America. The strength in the wheat market was tied to news that the Ukraine will officially ban exports beginning on Nov. 15, with no clarity as to the state of sales already made for after the export ban takes effect. 

Block cheese: $2.055 (up 1 cent)

Barrel cheese $2.025 (up 1.5 cent)

Butter: $1.89 (unchanged) 

Grade A NFDM: $1.56 (unchanged)

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