Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
The Class III futures closed out Friday’s mostly quiet trading session with contracts settling with mixed, but mostly lower prices. The May contract posted the lone gain in price, adding a penny, while the remaining 2013 contracts finished between 7 and 22 cents lower.
Milk production across the U.S. is mixed as volatile weather conditions throughout the past couple months have staggered production rates. Production rates in most southern regions of the country are trending lower as their spring flush has come and gone. In many of the northern regions production is trending higher as these regions are approaching their flush. Production in the Southwest and California remains mostly steady.
For the week ending May 4, the dairy cow slaughter under federal inspection decreased by 4,100 head (6.9 percent) week over week, totaling 55,800 head. The year-to-date slaughter now totals 1,143,800 head, 4.9 percent higher than during the same period last year.
Spot Session Results
Block cheese: $1.77 (up 0.5 cents)
Barrel cheese: $1.76 (up 0.75 cents)
Grade A NFDM: $1.68 (unchanged)
Butter: $1.62 (up 1.5 cents)
The grain markets finished the week with mixed results as soybeans pushed higher, corn was mixed while the wheat contracts were pressured lower. The July corn contract settled 11 ¼ cents higher to the price of $6.52 ¾ while the December corn contract lost 4 ½ cents to the price of $5.19 ½. The July soybean contract finished the day at $14.48 ½, up 21 cents, while the November beans added 10 ¾ cents to $12.28 ¼. Corn planting rates are through to increasing dramatically, pressuring new crop prices lower while tightness in the cash market continues to support the near dated contracts. Weather forecasts call for rains across the Corn Belt this week which would further delay plantings in some areas raising yield concerns for crops planted at the tail end of May. Informa estimated Friday that corn plantings will total 96.8 million acres, down 455,000 from the March intentions report. The soybean market is rallying on expectations of near record levels of old crop supply tightness.
We look for corn to open 2 to 3 higher in July and 2 to 4 lower elsewhere, beans and meal much the same.
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