Class III futures generally close higher on CME

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

The Class III futures ended Friday’s trading session with the 2012 futures contracts settling between 2 and 17 cents higher, while the Jan13-Nov13 contracts closed out between 3 and 8 cents higher. The Dec13 contract was the outlier, bucking the trend by settling 11 cents lower for the day. The fourth-quarter futures pack average gained 11 cents for the day to the price of $21.00, while gaining a total of 26 cents for the week. 

The spot session was unable to produce a single trade in either the blocks or barrels, failing to provide much guidance for the Class III futures market. 

Milk production levels are steady to higher in the Northeast and Mid-Atlantic regions, while steady to lower in the Southeast. In the Midwest, milk production is near seasonal lows and will be slow to improve. Production out West remains steady, though processing plants in some areas are running near seasonal low levels. 

We look for the Class III market to open higher to start the week.

The U.S. dairy cow weekly slaughter for the week ending 9/29 totaled 64.5k head, increasing by 1.5k head (2.4 percent) over the week prior. Total head slaughtered for the year to date is now 2.2881 million head, up 5.9 percent over the same period last year. 

The grain futures markets ended the week with prices moving lower throughout the complex. The Dec12 corn contract fell by 20 ½ cents to $7.52 ¾ on the day, while losing a total of 4 ¾ for the week. The Nov12 soybean futures finished the trading session at $15.22 ½ after losing 26 cents for the day and a total of 29 cents on the week. 

The corn harvest sits at 69 percent complete with another 15 percent completed through last week.  This year’s corn harvest rate is now 40 percent ahead of last year. The soybean harvest is now 58 percent complete with a 17 percent weekly gain, and is 16 percent ahead of last year’s pace. The recent rains over the past couple days throughout the Midwest should help to slow the progress of the harvest.  

Look for the corn to open 8 to 12 cents lower and for beans to open 33 to 38 lower.

Block cheese: $2.10 (unchanged)

Barrel cheese $2.06 (unchanged)

Butter: $1.93 (unchanged) 

Grade A NFDM: $1.60 (down 3 cents)

These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. Commodity trading is risky and FCStone Group, Inc., INTL FCStone Inc., and their affiliates assume no liability for the use of any information contained herein. Although all information is believed to be reliable, we cannot guarantee its accuracy and completeness. Past financial results are not necessarily indicative of future performance. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. References to and discussions of exchange traded products are made solely on behalf of FCStone, LLC. References to and discussions of OTC products are made solely on behalf of INTL Hanley, LLC, and OTC products are only available to eligible counterparties.

 

 



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