Editor’s note: This market commentary is provided by the Dairy Division at FCStone/Downes-O'Neill in Chicago, Ill.
The Class III market posted 580 total trades in a mixed session Friday. The 2012 contracts settled between 7 cents lower and 11 cents higher, battling back from losses established early in the trading session. The third-quarter futures pack gained just two cents on the day to settle at $17.41, a gain of 41 cents on the week.
The Class III futures market continues to find support from weather-related concerns across the country, with the recent high temperatures thought to be helping to curtail production levels. Weather forecasts point to continued high temperatures in the coming week, helping to support the recent bullish push in the Class III prices.
People still seem to express $1.60’s as reasonably priced cheese.
In the grain complex, following Friday’s report, we saw corn and bean products trade up into the release of the report (mostly on outside market extreme strength), shoot down when it was released and then right back up when people had a chance to read the contents of the report. Acreage was larger than expected for corn and beans, with larger stocks reported on beans and a supporting number for corn stocks. We settled with corn in July up 20’4 to $6.72 ¼, but new crop up only between 2 and 4 cents. This market will continue to trade according to the weather forecast. December corn settled at $6.34 ¾. Beans were up 46’6 cents in July to $15.12 ¾ and December beans settled at $14.15 ½.
Overnight, we saw some really big rallies, which in corn tempered a bit by morning but were still large in increases on continued weather concerns. It is dry and hot and expected to continue as we are supposed to be making this crop:
We look for corn to open 17 to 20 cents higher and for beans to open 12 to 17 higher.
Daily CME spot market prices:
Block cheese: $1.65 (unchanged)
Barrel cheese $1.675 (unchanged)
Butter: $1.5275 (up 0.75 cent)
Grade A NFDM: $1.2275 (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., 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.