Class III futures open the week relatively quiet

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

It was a relatively quiet open to the week for the Class III market, After a slightly higher open, prices traded to a mixed close when the spot cheese markets both closed unchanged.

Volume was strong at over 960 contracts traded. Nearby months were mostly higher as they continue to play catch-up to the spot market. From Nov through May, prices closed 2 to 15 higher on the day. Deferred futures, however, were under a little pressure likely as producers were looking to sell with the grain markets moving to new lows. From June through Dec, prices settled steady to 8 lower.

Spot session results:

Block cheese: $1.875 (unchanged)

Barrel cheese: $1.82 (unchanged)

Grade A NFDM:  $1.90 (unchanged)

Butter: $1.475 (unchanged)

It was a red day for the grains as reports of strong harvest progress and soybean supplies making their way into the pipeline kept price pressure on the market. The physical market pressure led to a technical sell-off as beans led the way lower, falling by 28.75 cents to $12.7125; corn traded to a fresh low closing down 9.25 cents at $4.3075, and wheat closed down 9.75 cents at $6.8100.

After the close, harvest reports had corn 59 percent harvested vs. a 62 percent average, while soybeans were 77 percent harvested ― right in line with their historic average. It’s hard to read too much into the harvest progress numbers, so the big question for today is will we see follow-through technical weakness or can we pull out a “Turnaround Tuesday.”

Follow-through buying from yesterday continues this morning, with corn expected to open 1 to 4 cents higher and beans 5 to 10 higher.

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