Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.

Once again Wednesday, the spot market failed to provide any direction to the Class III futures market, as both the blocks and barrel markets saw two trades but closed unchanged on the day. We hear little in terms of a change in sentiment short-term with a very balanced market and most participants seemingly happy to sit on the sidelines until more clarity is available.

Big volume was seen on Class III futures yesterday, and huge volume compared to previous sessions was seen in options market. Over 1,300 Class III futures traded, and heavy activity in 2014 options led to over 2,000 calls trading and over 3,500 puts trading. Futures finished the day 1 lower in Nov, 1 to 13 higher from Dec through March, and mixed from -4 to +1 from there through the end of 2014.

Perhaps the spot market will give us a sense of direction to close out the week. But with a five- week pricing month in November, the spot participants may choose to back away given the current balance in the physical market.

Spot session results:

Block cheese: $1.875 (unchanged)

Barrel cheese: $1.82 (unchanged)

Grade A NFDM:  $1.90 (unchanged)

Butter: $1.50 (up 2.5 cents)

Grain futures turned in a mixed session with bean buying early and late pushing that market higher by 8.5 cents to $12.7850, while the wheat market was under pressure most of the day with the news that India had lowered their minimum government price for export sales to $260/ton from $300/ton.

This morning, we look for corn to open 3 to 6 cents higher and beans 7 to 12 higher.

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