Cheese barrels down 1 cent on CME

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

The Class III market ended the holiday-shortened week posting a total of 838 trades with mixed results. The 2013 contracts closed out the day with settlement prices ranging between 18 cents lower and 5 higher. The 2013 first-quarter futures pack average price settled at $18.28, down 11 cents for the day, while down just 5 cents for the week. 

Demand for fluid milk will be rebounding this week as schools get back to their normal schedules. Milk supplies in the Northeast remain heavy, while production out West is still running behind last year by significant margins at many operations. The financial stresses on Western producers have moderated slightly of late, though many don’t believe this will last.

The grain markets entered the New Year on a bearish note as the grain complex sold off Friday.  The Mar13 corn posted a loss of 9 cents on the day, settling at $6.80 1/4, while shedding a total of 13 ¾ cents week over week. The Mar13 soybean contract fell 19 ¼ cents to close out at $13.67 1/4, with a total weekly loss of 50 ¾ cents. 

Export sales continue to weigh heavily on the grain complex ― complicated more so by the deteriorating condition of the Mississippi River which will delay or prevent grain shipments. 

Informa released its production estimates Friday, adding to the bearish tone of the grain markets. The results listed below, as traders position themselves before this week’s USDA grain report on Jan. 11.    

INFORMA U.S. PRODUCTION ESTIMATES:

Corn Yield 123.3  bpa vs. USDA 122.3
Corn Prod 10,800 mil bu vs. USDA 10,725

Soybean Yield 40.1 bpa vs. USDA 39.3
Soybean Prod 3,040 bpa vs. USDA 2,971

This morning, we look for the grain markets to open firm.

Block cheese: $1.76 (unchanged)

Barrel cheese $1.72 (down 1 cent)

Grade A NFDM: $1.5575 (unchanged)

Butter: $1.50 (up 0.5 cent)

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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