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

Class III futures showed strong volume yesterday as a flurry of fresh market reports were released.

First, it was the GDT report which showed cheese for Sept and Oct delivery around the $2.20 mark ― a far cry from our spot markets. Those markets continued to come under pressure yesterday with blocks down 2 cents to $1.7075 and barrels off 2.25 cents to $1.6850, and that pushed futures lower, as well, on over 1,800 total trades. Settlements ranged from 13 to 23 lower in the July through Sept contracts and steady to 8 lower on the remaining 2013 contracts.

Later in the day, we got the dairy products report, as well as the April export numbers from FAS. Both reports were supportive with cheese exports up 7 percent Jan-April year over year. It remains to be seen if this can trigger a rebound in the spot market moving forward, but overnight got off to a better start up 1 to 12 cent from June through Dec albeit on very light volume.

Spot Session Results

Block cheese: $1.7075 (down 2 cents)

Barrel cheese: $1.685 (down 2.25 cents)

Grade A NFDM:  $1.685 (up 0.5 cent)

Butter: $1.54 (unchanged)

The grain markets continue to see sizeable intraday swings. But yesterday’s session saw prices settle mixed within a few cents of unchanged with weakness seen in the new crop contracts, while old crop prices were firmer. July corn finished 4.75 cents higher at $6.6050. Meanwhile, December corn was down 7 cents to $5.5300. July beans fell by 3.75 cents to $15.2875, while November was down 9.50 cents to 13.16.

The market will likely continue to debate total final acres and yield potential in the coming weeks and USDA may elect to cut the crop size, as well, in the upcoming June 12 report. But, historically, late planting seems to have very little correlation to a change in acreage or the final yield number. It’s important to remember there is an awful lot of the growing season yet to come. We continue to look for opportunities to buy puts against physical purchases and to buy calls against open corn needs as the market swings toward extremes until the final production picture comes clearer.

This morning, we look for corn to open mixed from +2 to -5 cents and beans steady to 10 lower.

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