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

Class III milk prices firmed yesterday in a soft block session day. The fact that prices moved up post-spot is bullish, the fact that once again price strength came on lighter volume is bearish. Unless we get a higher price day with strong volume, this thing looks somewhat limited on price strength short term.  Cheese futures managed to trade over 100 contracts on a firm session with July leading the way up .0100 to 178.9000. The spot cheese market has been inverted for eight straight sessions; last year, it saw 13 consecutive session of inversion having begun June 21.

Spot Session Results

Block cheese: $1.715 (down 0.75 cent)

Barrel cheese: $1.7725 (unchanged)

Grade A NFDM:  $1.7025 (unchanged)

Butter: $1.535 (unchanged)

In the grain complex, equities ran up, energies firmed on Syria concerns and the grains began yesterday down but turned around on outside market factors and old crop tightness.

Old crop July corn probably isn’t going anywhere but over $7. As we approach first delivery notice at the end of this month, we do have some susceptibility to find rolling but whether it’s sooner or later that contract looks poised to blow through $7 like a warm knife into butter. Beans were lower, but new crop fell almost 9 cents more than old crop.

The real story was the old crop corn and, in general, the fending off of daily lows for the grain complex. In the afternoon, we got crop condition reports. First, beans are now 85 percent planted vs. 98 percent a year ago and 91 percent on average. The corn condition was rated 64 percent “good” or “excellent” ―1 percentage point above both last week and last year, while beans were rated 64 percent, same as last week and 8 percent ahead of last year. No real worries there to the crop already planted, but still overnight there was no thrust lower. What can provide that big push lower that so many have been anticipating? And if it doesn’t come, do prices pop upward? All we are saying right now is the boat is very heavy to one side and that makes us a little bit nervous.

This morning, we look for grains to open steady to 5 higher across the board.

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