Spot cheese up Monday

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

Class III and cheese futures were under some sell-side pressure early on yesterday. In front of the afternoon’s Cold Storage report, buyers were somewhat scarce amid talk of inventory mounting concerns. The spot market activity alleviated much of that concern, as blocks saw their first up day since Oct. 3. And barrels, which jumped up strongly ― 5.25 cents ― saw their first uptick since Oct. 4. The cheese price feels heavy, though, and stagnating fast. While volume in Class III was slightly below normal, despite the big price swings, the cheese futures saw a very strong trade near 200 contracts as prices wound up slightly lower on the session.

The grain markets tried to roar in bullish fashion very early in the morning, but that rally fizzled out quickly. Beans led the charge ― no shocker there. But corn struggled all day with a tight trading range ― less than 5 cents ― and pulled down by a plunging crude oil market. As corn finished just a quarter cent lower, nothing changes from last week’s snapshot perspective but certainly there is more resistance to the upside than some might have thought. Technically, it was an “inside day,” meaning that the price activity remained inside the range of the previous session. And inside days are most often followed by resumptions of the previous trend which, in this case, is upward.

Look for corn to open 3 to 6 cents lower and for beans to open 8 to 12 lower.

Block cheese: $2.01 (up 1 cent)

Barrel cheese $1.97 (up 5.25 cents)

Butter: $1.9025 (up 2.25 cents) 

Grade A NFDM: $1.56 (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.

 

 



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