Dairy markets: Cheese remains strong

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

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

  Class III futures were soft most of the session and closed anywhere from up 6¢ to down 13¢ on steady to lighter volume. It should be noted that we did see the market turn around after the pit close and go into positive territory all the way out to July of 2015. The 4Q 2014 pack average settled below the $20.00/cwt. level to $19.93/cwt., but also recovered after the close of the pit session, which was followed by overnight price increases as well.

The spot cheese session was strong again yesterday, moving up in both blocks and barrels. While the rest of the world continues on a down swing in their cheese prices, we still continue to be supported domestically. Does this mean we make a run back towards $2.30/lb.? We think not, but it does lend us to continue to have some near-term support for the spot market. Cheese futures were generally lower. As with the Class III markets, we did see prices jump after the close of the pit session.

Yesterday was one of the busiest trading days’ we have seen in a while for the whey markets, with prices generally higher.

 

August 6 spot session results:

Block cheese: $2.0900 (up 2.0¢)

Barrel cheese: $2.1075 (up 0.5¢)

Grade A NFDM: $1.5700 (down 2.0¢)

Butter: $2.4000 (unchanged)

 

Today's expectations:

• Class III, Cheese & Dry Whey to open higher

• Class IV to open soft

• Butter & NFDM to open weak

 

Grain futures 

Corn closed up 7¢ in the December contract, bouncing off recent lows in a technically oversold market.  Export inspections were stronger than expected and have the market looking towards today’s export numbers. There are also rumors circulating that Argentina may reduce corn export licenses. 

Soybeans traded 14.5¢ higher in November, closing within a penny of the highs.  This strength looks to be highly technical in nature. 

The aggression on the Ukraine border will continue to affect the grain markets. Russia announced that imports will be restricted from any sanctioning countries.  Many believe that this is undoable, since Russia imports 40% of their food. Russian opposition activists are suggesting that this will just lead to importers standing outside of government offices with suitcases of cash.   
 

Today’s expectation:

• Grain complex to open lower

 

The trading of derivatives such as futures, options, and swaps may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand those risks prior to trading. Any reference to past performance is not indicative of future results. All references to futures/options trading are made solely on behalf of FCStone, LLC. All references to swap execution and bi-lateral swaps are made solely on behalf of INTL Hanley, LLC. FCStone, LLC will clear swaps when applicable. Swaps are only available to eligible counterparties. All observations of economic, political and/or market conditions are not intended to refer to any particular trading strategy, promotional element or quality of service provided by INTL FCStone Inc. and its subsidiaries and should be construed as market commentary. All recommendations to buy or sell a specific derivative or forecasting statements regarding market activity and the pricing thereof should be construed as a solicitation in any jurisdiction in where such an offer or solicitation would be legal. Proper context and guidance including but not limited to the particular trading objectives, financial situations and the needs of the intended audience were taken into consideration when this recommendation was prepared. Contact your account representative for specific advice to meet your specific trading preferences or goals. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by INTL FCStone Inc. and its subsidiaries. Sources of information believed to reliable were used in preparing such observations, and no guarantee or representation regarding the accuracy of those sources has been made. INTL FCStone Inc. and its subsidiaries are not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material.



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


RX7320

When moving hay to feed dairy cows, farmers are seeking a versatile tractor. KITOI’s new Tier 4 RX series tractors ... Read More

View all Products in this segment

View All Buyers Guides

)
Feedback Form
Leads to Insight