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

Class III trading volume fell off yesterday as just 923 total trades registered in a subdued trading session. And November broke above the 21 level to settle at $21.06/cwt. after October will pay out $21.02. Settlement prices ranged from 8 cents lower to 9 higher, as the 2.5-cent slide in the spot barrels price and steady block price failed to trigger much selling pressure. 

Milk production continues increasing nationally due to seasonality, though still remains below year-ago levels. And pressure is on out West with talk of lower-quality forages awaiting feed use in the Midwest in the near future. 

Class III futures should find a measure of support from holiday demand alongside concern over milk production capabilities.

The grain markets finished the day with prices moving higher, as concerns regarding South American weather and planting intentions drove price action. The Dec12 corn contract led the way higher, gaining 14 cents to settle at $7.55 ¾, while the Jan13 soybean futures managed to post a 12 ¼ increase to $15.48 ¾. 

The U.S. corn harvest in 91% complete, up 4% from last week, while the soybean harvest added 7% to a total now of 87% complete, both ahead of last year’s pace. 

FCStone will release its crop estimates Thursday afternoon, with Informa’s estimates following on Friday morning.

Yesterday’s bounce-back continued overnight, and we expect corn to open 4 to 6 cents higher and beans 13 to 16 higher.

Block cheese: $2.11 (unchanged)

Barrel cheese $2.00 (down 2.5 cents)

Butter: $1.8975 (up 0.75 cent) 

Grade A NFDM: $1.56 (unchanged)

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