Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
The Class III futures closed out last week mixed, but mostly lower, as contracts settled between 2 higher and 40 lower on over 1,300 total trades.
Milk production in the central U.S. is inconsistent, as the recent bout of frigid temperatures in the North Central has pushed milk output lower and feed availability. And varying rations in other areas are affecting production rates. Milk production in the Northeast and Mid-Atlantic regions is steadily increasing as weather conditions improve, while out West producers are contending with quickly warming temperatures as California is seeing temps as much as 15 degrees above normal and Arizona is reaching the 100-plus mark.
For the week ending April 20, the dairy cow slaughter under federal inspection decreased by 1,600 head (2.5 percent) week over week, totaling 62,300 head. The year-to-date slaughter now totals 1,028,100 head, 4.7 percent higher than during the same period last year.
Spot session results:
Block cheese: $1.91 (up 0.5 cent)
Barrel cheese $1.73 (up 3 cents)
Grade A NFDM: $1.7475 (down 1.25 cents)
Butter: $1.65 (down 3.5 cents)
The grain markets finished the week with mixed prices as corn and wheat were pressured lower, while soybeans posted gains. The July corn contract settled ¾ cents lower to the price of $6.61¼, while the December corn contract dropped 5 ½ cents to the price of $5.53 ½. The July soybean contract finished the day at $13.87¼, up 15 cents, while the November beans added 17 ¼ cents to $12.21¼.
The prospects of improving weather conditions and planting prospects weighed on the corn as traders are now forced to contemplate historically tight old crop supplies with an outlook for normal summer weather conditions. The soybean market rallied on concerns of tight U.S. supplies for the interior of the nation as availability in some areas is limited. According to a story from Reuters on Friday, Cargill Inc. will idle its soybean processing plant in Lafayette, Ind., at the end of this week due to poor profit margins and the tightest soy supplies in at least nine years. The plant is likely to be shut down until more soybeans become available during the autumn harvest.
This morning, we look for corn to open 15 to 20 cents lower and beans to open steady to 6 lower.
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