Milk futures 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 O'Neill in Chicago, Ill.

It was a much-anticipated spot session after the massive declines seen Wednesday. But when nary a trade or price movement occurred on the cheese markets, it became a relatively light session with just over 1,000 contracts traded on the heels of a 2,000-contract day Wednesday.

The lack of follow-through selling on the spot session sent futures higher across the board by the close. Prices from Nov all the way through Dec 2013 were higher by 1 to 22 cents. January and February led the gains up 22 and 17 cents, respectively. Chatter around the market was that cheese is quickly starting to free up in the Midwest, and that seems likely to keep bulls on the defensive in the coming sessions. We now hear talk of $1.90 cheese, and potentially below on the physical market, which the futures have been pricing in. December continues to trade at a sharp discount, settlement of $19.88, +0.06 yesterday, vs. spot valuation of Class III near $20.20.

The grain complex traded mostly lower yesterday on yet another slow week of export sales and ahead of the USDA report this morning. Corn closed down 3 cents at 741.25 and weekly sales were 6.2 million bushels vs. estimates of 3.9 to 11.8. Soybeans finished the day down 9.5 cents at 1499.25 with weekly sales at 7.0 mln bushels vs. estimates for 14.7 to 25.7.

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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