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

Class III futures chopped sideways in a mixed session yesterday. Futures finished from 7 higher in Jan to 6 lower in both April and June. Volume remains moderate just below 1000 contracts yet again at 845. The spot session looked as though it may trigger a move in futures when barrels fell to $1.6575 but buyers stepped in once again to take advantage of lower prices and bought 6 loads on the day bringing barrels back up to $1.6850 ½ a cent lower where they finished the session. The block market remained quiet on the day with no bids and no offers posted. With the lack of movement on spot, futures are unwilling to take a firm direction though premium does seem to be coming off of the forward months now as downside pressure seems to be stronger than buy interest.

Spot session results:

Block cheese: $1.72 (unchanged)

Barrel cheese $1.685 (down 0.5 cent)

Grade A NFDM: $1.535 (down 1.25 cent)

Butter: $1.4475 (down 0.25 cent)

It was another relatively quiet and mixed day on the grains yesterday, now just a few hours away from the Jan USDA report at 11 a.m. central time this morning. The only real news to hit the market yesterday was weekly export sales which remain relatively soft with corn coming in at 0.0 vs. expectations for 3.9 to 11.8, soybeans at 14.9 vs. expectations for 7.3 to 14.7 and wheat at 8.6 vs. expectations for 7.3 to 16.5. Below we include a chart of the cumulative corn export shipments through Jan 3rd going back to 1990 and as you can see we are running extremely far behind our normal pace so far this year. Certainly, low water levels on the rivers have caused a bit of an issue but the problems have been minor and almost certainly couldn’t have triggered a slowdown of this extreme. Corn finished the day up 4.5 cents just shy of $7 at $698.75, soybeans down 5.75 at 1379.75 and wheat down a penny at 744.5.

We look for corn to open steady to 3 cents lower and soybeans 8 to 14 lower.

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