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

Class III futures again saw a rally yesterday with futures settling anywhere from +1 to +25 on the day. Since Nov. 20, the January contract has gained nearly 81 cents to settle at $17.97 ― within only 3 cents of the $18.00 mark. While January saw the biggest gains on the day, it looks as if there is a bit short covering coming into play in conjunction with some technical strength. As 2013 comes to an end in the next few weeks, it looks as if the Class III price will have bottomed out in March at $16.93 with the peak in November at $18.80.

Spot session results:

Block cheese: $1.88 (unchanged)

Barrel cheese: $1.775 (unchanged)

Grade A NFDM:  $2.00 (unchanged)

Butter: $1.64 (down 1 cent)

Corn futures settled up slightly, 1 ¼ cents as values moved lower midday with traders concerned over further China corn import issues. As rumors swirl, there is talk of three cargoes being rejected over GMO issues. Also, there is talk of China banning state stockpilers from purchasing imported corn and beans to safeguard against any GMO risks. Futures are trading at 39-month lows as a result of the burdensome U.S. supply. Jan beans saw double-digit losses yesterday to settle down 15 ¼ cents. Weekly export inspections slowed to 52.6 million vs. 67 million last week and 52.4 million a year ago. Total first quarter U.S. soybean exports are now estimated near 650 million bushels. Skittishness seems to be at play here surrounding Chinese buying with trade being influenced by the slightest of rumors surrounding a ban. Traders are also becoming more concerned surrounding tensions in the South China Sea. South American growing conditions are generally favorable with active rains forecast for Brazil.

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