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

Class III futures traded 1,178 contracts in a mostly lower fashion Friday as Open Interest rose by a noteworthy 238 contracts. Fresh selling is likely a reaction to continued spot cheese price weakness. Block cheese posted a new low for 2013 at $1.5750 on Friday, which is the lowest price since the beginning of last June. During the ensuing futures market weakness, most of the declines were posted thru June. While March posted the only double-digit loss Friday, the second-quarter pack lost 16 cents from the prior week to finish at $17.43.

Spot session results:

Block cheese: $1.575 (down 2 cents)

Barrel cheese $1.56 (down 1 cent)

Grade A NFDM: $1.4975 (unchanged)

Butter: $1.575 (up 2.5 cents)

The grain complex finished last week on a firm note. The corn and soybean markets are in the middle of a range-bound trade with users ready to buy on the bottoms and farmers waiting to sell at the peaks. This pattern is likely to continue until we get more comfortable ― or more worried ― about the weather patterns for the U.S. growing season.

U.S. weather has finally given us moisture in some of the driest regions. We keep hearing from farmers west of the Mississippi concerned about how dry it is on their farms. Eastern farmers have gotten good moisture and feel much better. Let’s hope the moisture keeps coming every week.

This morning, we look for corn to open 3 to 5 cents higher and beans to open 1 to 3 higher.

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