Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
Class III futures closed out last week with the 2013 contracts closing between down 8 cents and up 3, as just 566 contracts traded, with 340 of those taking place in the June and July months.
Manufacturing-milk supplies remain strong, and are growing in some areas, as most if not all schools have closed for the summer. In the Northeast and Southeast, milk production has plateaued, while in Florida production is declining due to increased heat and humidity which is adversely affecting cow comfort. California, Arizona and New Mexico are facing 100-degree-plus days. With these conditions increasing, cow discomfort and should weigh on production levels in those regions.
Spot Session Results
Block cheese: $1.7475 (up 0.75 cent)
Barrel cheese: $1.76 (up 1.75 cent)
Grade A NFDM: $1.6925 (up 0.25 cent)
Butter: $1.545 (up 0.5 cent)
The grain markets finished last week with the soybean and corn contracts pushing higher, while the wheat slightly lower. The July corn contract settled 3.00 cents higher to settle at the price of 662.25, while the December contract added 10.25 cents to close at the price of 558.50. The July soybean contract closed out the week at 15128.25, up 1.00 cents, while the November beans added 24.50 cents to 1330.25.
The rallies in the corn and soybean contracts were a result, in part, of lingering weather concerns. Some weather-forecasting models have called for additional rains in the Corn Belt over the next few days, which would again create planting delays for the crops. Brazil’s Ag Ministry cut its 2012/13 soybean production estimate by 200,000 MT to 81.3 MMT, while increasing the corn production estimate by 500,000 MT to 78.5 MMT.
This morning, we look for corn to open 4 to 7 cents lower and beans to open 7 to 10 lower.
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