Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
Yesterday’s USDA Milk Production report came out slightly bearish in comparison to expectations. Despite the slightly bearish call, December milk production was revised lower by 23 million lbs., to 16.79 billion lbs. Milk cow numbers increased from last month by 7,000 head. although they were down 13,000 from last year. Milk production per cow was 1,874 lbs. for the month, an increase of 19 lbs. year over year.
Class III markets again put in a positive session on the back of higher spot prices in the blocks and barrels. The second-quarter pack average settled up 11¢, while the second-half average gained 6¢. We saw some buying come into the cheese market. Blocks were up 2.25¢, while barrels were up 4.25¢. Whey markets were mixed overall.
Class IV markets were generally positive, with second-quarter contracts gaining 14¢ to settle at $22.06/cwt., and second-half contracts averaging $20.14/cwt. We continued to see more upside to the NFDM market. Cash butter markets failed to find inspiration, and futures ended the day generally mixed.
FC Stone's annual Dairy Outlook Conference will be held June 18-19, in Chicago. Visit www.intlfcstone.com/events for information.
Feb. 20 spot session results:
Block cheese: $2.13 (up 2.25¢)
Barrel cheese: $2.11 (up 4.25¢)
Grade A NFDM: $2.0450 (up 0.25¢)
Butter: $1.78 (up 1.0¢)
• Class III & Cheese to open soft
• Dry whey to open steady
• Class IV to open higher
• Butter to open firm
• NFDM to open higher
Corn and beans traded on both sides of unchanged, but both ended up finishing higher on the day. May corn was up 2¢ on the session to close at $4.6225/bushel, and May beans settled up 575¢, to $13.4775/bushel. We got a positive reaction to USDA’s acreage projections for 2014: corn is estimated at 92.0 million acres, down from 95.4 million in 2013; beans are estimated at 79.5 million acres, up from 76.5 million in 2013.
• Grains to open firm
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