Block cheese remains at $2.155

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

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

On Thursday, futures prices came out of the gate strongly with prices moving sharply higher on large volume prior to the spot session. September climbed all the way to 20.90 at one point — up 35 cents. However, prior to the spot open futures were off of their highs and when the spot market saw an offer in the barrels above the market and an unchanged offer in the blocks both go unfilled and no bid posted, both the volume and the price eased.

As the day wore on, what appeared to be continued commercial buy interest entered into 2012 months, pushing them higher and putting their gains in line with the nearby 2011 contracts as well. Ultimately, 2011 futures months were 7 to 16 higher, and 2012 saw double-digit gains from Feb through Aug and every month higher by 5 to 19 cents. Volume reached just over 1,200 contracts on the day. 

A lack of upside price movement in spot doesn’t mean that futures have to fall as we continue to price steep discounts into the forward curve. However, buying nearby futures at current levels without the added stimulus of a higher spot market is dangerous and ill-advised today. Producers ought to have sufficient protection through year end by now.

It was a  mixed but mostly softer market for the grains yesterday, as rains spread across the corn belt and export sales turned fairly soft again as we hold near the $7.00 level. Corn exports were 19.1 million bushels below estimates for 21.7 to 37.4, soybeans were 13.7 vs. estimates for 20.2 vs. 31.2 and wheat at 17.4 vs. estimates for 11.0 to 18.4. Throughout the day, larger production estimates for the EU and a slight increase in Brazilian corn production had trade considering strongly the possibility of increased feed wheat usage to undercut corn demand.

We look for corn to open 7 to 9 cents lower and soybeans to open 5 to 7 lower.

Daily CME spot market prices:

Block cheese: $2.155 (unchanged)

Barrel cheese: $2.13 (unchanged)

Butter: $2.095 (up 1.5 cent)  

Grade A NFDM: $1.525 (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., International Assets Holding Corporation, 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.

 



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


Grand L60 Series

Kubota’s Grand L60 Series combines a higher level of luxury with outstanding productivity never before seen in this class of ... Read More

View all Products in this segment

View All Buyers Guides

)
Feedback Form
Leads to Insight