Editor’s note: This market commentary is provided by the Dairy Division at FCStone/Downes-O’Neill in Chicago, Ill.
Eight hundred and eighty Class III contracts traded yesterday as prices fell early and only sank throughout the trading session.
No major news broke yesterday. It was the inactivity of spot (across the board) that simply let some money come out of a market that, on a futures basis, is substantially higher over the last several weeks without much underlying spot movement support.
Spot session results:
Block cheese: $1.65 (unchanged)
Barrel cheese $1.56 (unchanged)
Grade A NFDM: $1.52 (unchanged)
Butter: $1.555 (unchanged)
In the grain complex, soybeans are taking the brunt of the blame for falling grain prices, as the price slide in the bean complex clearly led the grain market slower. Talk of improved rain in South America is on the front lines, as well, as has been follow-through action from last Friday’s USDA report. USDA also published its 10-year baseline estimates with acreage estimates: corn 96 million acres vs. 97.2 in 2012, beans at 76 mil acres vs. 77.2 and wheat at 57.5 vs. 55.7.
Technically, it ugly for the bull breed ― March beans blew through the 100-day MA at 14.65 and finally found support at the 40-day moving average (14.35). The 50 percent retracement has held at 14.25 but looks shaky. March corn got as low as 7.01 and obviously psychological support rests at 7.00, but 7.05 was the 100-day MA. Corn might very well head toward 6.80, but expect a heck of a tussle at 7.00 even though that level was broken overnight as we now rest at 6.97, having been as low as 6.93 ¾ ― it’s the day session where the fight will be the strongest
We look for corn to open about 5 cents lower and beans a few higher.
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