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

On Friday, we traded only 272 Class III futures and only 40 cheese futures and Class III options barely cracked 100 themselves. We have to go all the way back to 12/29/06 ― yes 2006 ― to find a day in which fewer Class III futures traded (248). Nearly 88 percent of the Class III trades, 240 total, took place in the June through August contracts in which in month posted slight gains. 

According to the USDA Milk Production report on Friday, total U.S. milk production for April rose by 3.23 percent while the 23-state milk production rose by 3.28 percent. Although the results came in slightly below our expectations of a 4 percent gain in both areas, the results still represent excellent milking conditions throughout most of the U.S. 

Both the U.S. and 23 state milk-per-cow number came in at an increase of 40 pounds per cow. 

Milk production per cow sits at a historically high level, though with summer swiftly approaching, these levels should be destined for decline as higher temperatures will become detrimental factor. 

​​​​Divergent trading day for the grain markets as the surge in wheat prices helped to pull the corn higher, while the soybean complex sold off strongly. The July wheat contract jumped 37 ½ cents higher to $6.95 ¼ on both fundamental and technical support. The corn contracts rose in sympathy as the July corn contract pushed 10 ½ cents higher to $6.35 ½ while the December (new crop) contract rose 8 ¾ to $5.37. 

The historically rapid planting rate of the corn crop should lead to price weakness in the near term, given a lack of weather concerns in the coming weeks. The July soybean contract dropped 33 cents to close out at $14.05. The less-than-anticipated export results last week for the bean market continue to weigh on prices, as a test of the sub-$14.00 level should materialize Monday. 

Grab on tight we are in a weather market. The crop is in, but in many areas not faring well with temps above average for the second consecutive month in most Midwestern states. We believe the crop will wind up large An EU meltdown could push all things lower, but right now China is perceived as a buyer at a time that weather is a concern.

We look for corn to open 2 to 5 cents higher and soybeans to open 8 to 13 higher.

Daily CME spot market prices:

Block cheese: $1.50 (unchanged)

Barrel cheese $1.46 (unchanged)

Butter: $1.355 (unchanged)  

Grade A NFDM: $1.125 (unchanged)

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., International Assets Holding Corporation, 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.