Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
Class III futures saw a significant drop on Monday. The March contract hit limit-down on a couple occasions during the session, ultimately settling down 65¢. April wasn’t far behind, settling down 57¢, while other months were 4¢ to 32¢ lower through the balance of 2014. This seemingly is in the face of bullish consensus coming out of IDFA’s Dairy Forum last week, so perhaps yesterday was just a market correction triggered by fear ahead of the GDT auction this morning.
Cheese futures moved in line with the Class III market. March settled at $2.036/lb., a massive discount from current spot levels. Whey prices were also mostly lower.
Class IV futures opened the week lower, 9¢ to 44¢ lower on the day, with April leading the declines. Powder seemed to be the biggest culprit for the selloff.
Spot butter seems to be in the sweet spot from an international standpoint,; futures seemed to see spillover weakness from NFDM and Class III trading.
Feb. 3 spot session results:
Block cheese: $2.36 (unchanged)
Barrel cheese: $2.32 (unchanged)
Grade A NFDM: $2.04 (unchanged)
Butter: $1.89 (up 1.0¢)
• Class III to open lower as the overnight session opened to double-digit losses, but look to GDT and spot to determine the direction for the day
• Class IV, Butter and NFDM to open lower
Grain markets continued their recent rally, led by soybeans and export news. March beans closed up 10¢ at $12.9275 bushel; corn was up 1.75¢ to $4.3575/bushel. We see prices as now having limited downside into the spring months – for corn in particular.
Grains look to open higher, with soybeans and meal leading the way
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