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

Class III opened firm, weakened into spot and leapt to large gains later in the day ― all on pathetically low volume with almost all trading volume contained to the front three months and, in fact, 74 percent of the volume was contained to the front two months alone.

The buyers have more zest at the moment, as spot remained unchanged for the fourth day in a row and cheese sellers were absent again yesterday. Futures market sellers seem on edge, waiting for cheese to decline before selling.

Overnight, Class III traded a heavy 134 contracts with 89 of those in April and May. Prices were very strong with gains of 2 to 16 cents.  We look for milk to open higher.

Dragged by strong bean futures, corn moved upward but both closed off their highs. Steam from last Friday’s USDA report is likely all out now and we look for some short-term corrective action today or tomorrow.

Although cumulative corn export sales are down 14 percent from last year at this date with the USDA projecting exports down 7 percent on their annual forecast, some traders believe the export number ought to be adjusted higher in the next USDA report. But China has been buying corn and feed wheat on weakness not strength and, as such, we expect that they are not ready willing and able to be buyers from the U.S. at current levels. We shall see.

We look for corn to open mixed and for beans to open 3 to 5 lower. 

Daily CME spot market prices:

Block cheese $1.49 (unchanged)

Barrel cheese $1.46 (unchanged)

Butter:  $1.455 (down 0.75 cent)  

Grade A NFDM: $1.2675 (unchanged)

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