Class III futures ended last week on a positive note

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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 milk futures ended the week on a positive note with the Dec12 through Dec13 contracts posting gains of between 1 and 47 cents, despite unchanged spot cheese prices. The first quarter of 2013 futures pack average price settled Friday at the price of $18.22, gaining 34 cents on the day, while only posting a week-over-week gain of 7 cents.

Milk supplies are increasing in the Northeast and Mid-Atlantic regions, while Class II demand has slowed as most of the holiday products have already been shipped. Milk production in the Midwest is increasing, while manufactures are hesitant to take on additional loads of milk at current price levels. Milk production in the western U.S. is increasing slowly, while still below the production levels seen last year.

The grain markets ended the week on a positive note, spurred higher by strong soybean exports and better than expected soybean crush demand. The Mar13 corn contract closed out Friday at the price of $7.30 ¾, gaining 10 ½ cents on the day, while losing a total of 6 ½ cents for the week. The Mar13 wheat contract gained 5 ½ cents on the day, while losing a total of 47 cents for the week, to settle at $8.14. The Jan13 soybean contract jumped 19 ½ cents higher Friday to settle at $14.96 with a week-over-week gain of 23 ¾ cents. There is talk of concerns relating to the South American grain crops, as wet conditions in Brazil and Argentina have delayed soybean plantings and could have a negative effect on production totals. 

We look for corn to open mixed from -2 to +3 and beans to open 5 to 10 higher.

Block cheese: $1.725 (unchanged)

Barrel cheese $1.625 (unchanged)

Grade A NFDM: $1.5575 (unchanged)

Butter: $1.595 (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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