Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
An overall up-day yesterday in the Class III market brought a little hope to those looking for a resurgence of higher prices. I use the word “hope” sparingly, as volume on the day was light with just under 700 contracts traded and gains were consolidated to just three months (June, July & August). We saw our largest move yesterday in the July contract as it closed up +14 cents on the day, followed by the August contract up +9 cents. The fourth-quarter contracts were negative overall with the November contract losing -5 cents on the day; but this did occur in the face of a lower spot market.
It is possible we are putting in a base at these levels with the June and July contracts still holding over their last lows from Jan. 8, but there is just such a bearish fundamental tilt out there, it’s hard to ignore. We have summer break for the schools, flush in full swing if not done in most of the western areas and Midwest, as well as just awful weather keeping demand at bay. We get the feeling that we are in a grind right now and will need some type of event to really snap the market out of its current range.
Spot Session Results
Block cheese: $1.74 (down 1.5 cent)
Barrel cheese: $1.7075 (down 1.5 cent)
Grade A NFDM: $1.68 (unchanged)
Butter: $1.54 (down 0.5 cent)
Who called for all of this rain? I mean an occasional shower is not a bad deal, but some parts of northern Illinois saw as much as 2 inches of rain fall in less than an hour the night before last. The entire midsection of the U.S. is dealing with heavy rains and possible tornados all the way from Texas to upper Minnesota.
Well, this put the new crop corn market into a tizzy yesterday ― and with good reason. In the short-term, it will be very hard if not impossible to get the last of the corn acres in with all of the rain, which leaves farmers in a quandary. Do you switch to beans with only a couple of more weeks of planting time left, do you plant something else altogether, or do you just chuck it up to leaving those acres out for the season and make a go of it next year if you can’t get them planted? None are good choices for farmers.
July corn settled out at 665.00 down -1.25 cents on the day, while the December futures rallied +14.75 cents to close at 565.75 on the day. The soybean market took similar action, but not on the same scale that corn did. The July contract closed out 1501.75, down -7.50 closing above support at the 1500.00 level and the November contract closed at 1288.50, up +.50 on the day.