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

The Class III futures closed out the week mostly higher amid a flurry of activity within the spot cheese session. The September through June of 2014 contracts gained between 4 and 34 cents.  The August 2013 contract managed to post the sole decline of the session, falling a penny lower.  The fourth quarter futures pack average gained 25 cents for the day to finish at $17.29, yet still posted a week-over-week loss of 20 cents, thanks to the early week sell-off sparked by the bearish results of the Monday’s Milk Production Report for the month of July.    

Spot session results:

Block cheese: $1.67 (up 2.25 cents)

Barrel cheese: $1.6425 (up 0.5 cent)

Grade A NFDM:  $1.80 (unchanged)

Butter: $1.395 (up 2.5 cents)

In the grain complex, the markets rallied higher Friday, led by the strength of the soybean futures, as weather forecasts call for clear skies and rising temperatures for the next six to 10 days and the Pro-Farmer crop tour results created some unease amongst market participants as they pegged both corn and bean harvests smaller than expected. 

The September corn contract gained 8.00 cents to close out at 495.50, while the December corn contract added 5.50 cents to settle at 470.00. The September soybean contract leapt 43.25 cents higher to finish at 1365.25, as the November soybean contract tacked on 41.25 cents to finish at 1328.00. 

The Pro Farmer Tour resulted in a 2013 U.S. corn crop estimated to produce 13.46 billion bushels with an average yield of 154.1 bushels per acre. Mention of late maturity and major uniformity issues for the Iowa crop and surprisingly dry soil in Illinois may put these estimates in jeopardy.  The 2013 soybean crop was estimated at 3.158 billion bushels with an average yield of 41.8 bushels per acre, with talk of low pod counts and concerns for late-planted crops in areas, helping to drive the futures contracts higher. 

For the time, the bulls have the edge in the markets as the weather models for the near-term bolster ideas of higher prices, propelling the rally to new heights again last night. 

This morning, we look for corn to open 14 to 20 cents higher and beans to open 45 to 55 higher.

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