Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
Plenty of milk didn’t halt the rally earlier this year but without fresh, startling news from overseas it has put the brakes on of late.
The April 2013 milk production report was released this afternoon but due to the sequester cuts the report was released with partial data. There are no estimates of total milk cows nor estimates for milk per cow.
We would term this report slightly bearish as total milk production was slightly greater than expectations. Total U.S. milk production was announced at 17.270 million pounds above our estimate for 17.213 million pounds. The 23 state milk production came in at 16.079 million pounds up 0.3 percent from last year and slightly above our expectation for 16.033 million pounds.
Spot Session Results
Block cheese: $1.77 (unchanged)
Barrel cheese: $1.755 (down 0.5 cents)
Grade A NFDM: $1.68 (unchanged)
Butter: $1.595 (down 2 cents)
This week’s crop progress report was the most highly anticipated this year. Expectations were high heading into yesterday afternoon’s report and traders were talking record one week planting pace. Amid the anticipations corn (and the grain complex at large) see sawed all day yesterday between pushing and breaking support to holding it and ultimately closing mixed – mostly higher with nearby corn lower; the weight of the expectations were felt almost too strong to live up to. In the end though corn was revealed to be 71 percent planted this week vs. 64 percent expectations and compared to just 28 percent last week (it is a record pace). We have caught up as the average is 79 percent, forget last year’s 95 percent at this time, we are back to being on schedule.
Beans jumped too coming in at 24 percent vs. 6 percent last week and 42 percent on average. Overnight corn felt the pressure of the report as prices fell and all eyes anticipate December 13 corn with a four in front of it very soon, but beans held firm on incredibly tight old stock supplies, note the July13/November13 spread below which has really exploded.
We look for grains to open lower, save for front month beans.
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