Class III futures may start week steady to lower on CME

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

The dairy markets have been closed for the past two trading days due to the Thanksgiving holiday.  

The first quarter of 2013 futures pack ended Wednesday’s session at the price of $18.64 with a total gain of 19 cents for the week. The Milk Production Report for the month of October was considered slightly bearish versus expectations as total U.S. production came in at 16.255 billion pounds, down 0.14 percent from the same period last year, but up 0.14 percent from the month prior. Production for the 23 states posted at 15.166 billion pounds, down 0.3 percent from last year, but up 0.4 percent from last month.

Fluid milk demand is decreasing, following an established post-holiday trend, sending more milk into manufacturing in the near term. Class III futures should start the week with steady to lower price action. 

For the week ending Nov. 10, dairy cow slaughter under federal inspection increased by 1,800 head (2.9 percent) week over week to total 64,300 head. The year-to-date slaughter has reached 2.669 million head, 6.2 percent higher than during the same period last year.

The grains complex closed out the holiday-shortened week with higher prices. The Dec12 corn contract managed to gain 4 ½ cents on Friday to close out at $7.45 ½, while gaining a total of 18 ½ cents for the week. The Jan13 soybean contract gained 10 ½ cents to close out at $14.18 ¾, while adding a total of 35 ½ cents throughout the week.   

We look for corn to open 3 to 5 cents higher and beans to open 5 to 8 higher.

Block cheese: $1.825 (unchanged)

Barrel cheese $1.745 (unchanged)

Grade A NFDM: $1.5575 (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., INTL FCStone Inc., 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.

 

 



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