Class III futures mostly negative Tuesday

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

Class III markets yesterday found themselves with a little continuation of the previous session’s sell-off on a lower-volume trading day.

Early in the session, we were positive in the 2013 contracts and looked as if we were going to get back some of the prior days’ losses. That did not last long, as just before the pit opened we went negative again and never really got much more movement in either direction from there. The Oct. 2013 contract took the largest share of thes losses, settling at $17.66 and down 14 cents on the day, while we did manage to have one positive to the complex which was the Dec. 2014 contract that settled at $16.97, up 2 cents on the day.

Class III did manage to hold support most importantly in the October 2013 contract which comes in around the $17.60 level. If we see a violation and a close below that number Wednesday, we could see a larger sell-off wave to the last low around $17.27. It never hurts to look at the technical trade when you have few fundamentals to hang your hat on!

Spot session results:

Block cheese: $1.7975 (down 2.25 cents)

Barrel cheese: $1.7675 (down 2.25 cents)

Grade A NFDM:  $1.83 (unchanged)

Butter: $1.52 (unchanged)

In the grain complex, another piece of data and another mixed bag ending mostly negative for corn and beans. FSA (Farm Service Agency) preventive planting numbers showed that 3.5 million acres of corn prevented from planting vs.3.4 million in August. Critical planted acres suggested at 91.4 million vs. 88.7 million in August and compared to USDA’s total planted acreage estimate of 97.3 in September. The trade grappled with a wide range of interpretations of this data to end the day, down -0.0250 to $4.5650.

While in the bean market, we had another down day and tested close to the gap we have had in the Nov. 2013 chart at the $1331.00 level. The trade got close, but didn’t quite cover the gap and missed it by 1 cent. This may be a case of “close is good enough” for horseshoes, hand grenades, and soybeans, as the market soundly rebounded from there to close out at $1342.00, down 5 ¾ cents on the day. We shall see, but overall, we are expecting bean prices to remain steady if not lower here in the near-term. FSA numbers for beans showed plantings at 74.6 vs. 72 in August. This compares to the USDA September estimate at 77.2. Beans will continue to trade weather and any other data that comes out until we get the official USDA report on Oct. 11.

This morning, we look for corn to open mixed from -1 to +3 cents, soybeans 3 to 6 lower.

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