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

Last Friday's Class III futures were mixed, but mostly lower. The second quarter futures pack average settled down 16¢ at $19.01/cwt., with a week over week decline of 36¢. Nearby futures are now in line with spot, so they will be very sensitive to spot cheese price movement this week. A continually developing, fundamentally bullish, drought situation in California, and to a lesser degree surrounding Western states, deserves consideration for both producers and end-users alike. Cash cheese futures ended Friday’s trading session with mixed pricing.  The sharp decline in the spot cheese markets brought the February through May contracts down by 2.3¢ to 2.9¢. The second quarter of 2014 futures pack finished the week at the price of $1.8710/lb., down 2.27¢ week over week. Whey futures finished out the week with nearly every 2014 contract settling at their respective low price of the trading session.  

Class IV futures settled for the week between 7¢ higher and 17¢ lower as the weakness displayed by the butter market overpowered the slight strength of the NFDM. Butter futures closed Friday between unchanged and 4.45¢ lower.  NFDM futures settled Friday with the February through May contracts increasing by 0.25¢ and 1.275¢.


Feb. 7 spot session results:

Block cheese: $2.2325 (up 9.75¢)

Barrel cheese: $2.050 (down 9.5¢)

Grade A NFDM:  $2.0175 (unchanged)

Butter: $1.82 (down 3.0¢)


Today's expectations:

• Class III & Cheese to open soft

• Dry Whey to open soft

• Class IV & NFDM to open soft

• Butter to open slightly lower


Grain futures

Grain markets traded in anticipation of Monday’s USDA report, with soybeans and corn moving higher. Forecasts are looking for USDA to project increased corn exports and lower ending stocks, while the soybean outlook still calls for tight ending stocks.


Today’s expectation:

Grains look to open lower  


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