Class III futures close mixed on CME

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

It was a quiet open to the week for most of the dairy complex on Monday ahead of the GDT auction later this morning. Class III futures finished the day mixed from -3 to +4 from July through June 2014, and volume barely crept over the 500-contract mark for the session.

Futures were very quiet to slightly lower overnight, and turned a bit higher prior to the spot session as 90+ degree temps are in the forecast for the majority of the U.S. this week, causing some concern about milk production and component levels.

The spot session failed to offer direction to futures, as well, with the barrels falling a half a cent, while the blocks were unchanged, pushing us back within the normal historical range. Warming temps could mean additional cheese demand for grilling in the coming weeks, as well.

Spot session results:

Block cheese: $1.675 (unchanged)

Barrel cheese: $1.645 (down 0.5 cent)

Grade A NFDM:  $1.75 (unchanged)

Butter: $1.48 (up 2 cents)

The grain markets traded to a mixed close on Monday with strong divergence between the corn/wheat and soybean markets. Prices opened lower across the board, but continued demand for soybeans and soymeal triggered a rally in the nearby contracts which, in turn, pulled deferred futures higher. On the day, Aug. soybeans were up 24.75 cents to $14.5375, while Nov. closed just 6.5 cents higher to $12.6375. Dec. corn did test a sub $5.00 price during the session, bottoming at $4.9825 before closing off its lows, down 5.75 cents at $5.1575, on the strength of the soybean rally.

All eyes remain focused on the weather which still shows decent rains for the majority of the Corn Belt coming up this weekend. The longer-term maps show normal to above-normal temps with normal to above-normal rainfall.

This morning, we look for a higher open to the grain complex.

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