Class III futures market closes down

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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 futures market finished the holiday-shortened week with prices moving lower throughout the 2013 contracts, with losses ranging between 4 and 21 cents on just under 1,000 total trades. 

Milk production in the Midwest continues to improve after a couple weeks of frigid temperatures, leading to increasing cheese production where available while other manufacturers are faced with inventories above comfort levels. California’s milk production continues along a slow, upward trend as weather conditions turn more favorable, while still lagging behind last year’s levels. Production in the Northeast and Southwest has been improving significantly, while fluid demand has fallen off as spring breaks for schools across the nation has limited needs.  

Spot session results:

Block cheese: $1.6925 (unchanged)

Barrel cheese $1.5975 (unchanged)

Grade A NFDM: $1.56 (up 1 cent)

Butter: $1.63 (down 1 cent)

The grain markets on Thursday faced extensive selling pressure throughout the day after the release of the USDA’s Quarterly Stocks and Planting Intentions Report. Market expectations were skewed towards bullish results, and after the report’s release at 11 a.m., the futures contracts immediately garnered double-digit losses, reaching limit down in the near-dated corn contracts. The May corn contract settled 40 cents lower to the price of $6.95 ¼, while the December corn contract dropped 32 ½ cents to settle at $5.38 ½. The May soybean contract closed the day down 49 cents to $14.04 ¾. With the bearish nature of the current grains outlook, expect continued weakness in the near term as longer-term (new crop) eyes now turn to the weather reports and forecasts for guidance. 

On overnight Easter Holiday trading, old crop corn continued to take a continued beating, dropping near the standard 40-cent limit. Keep in mind that we have expanded limits (60 cents) today in corn.

We look for old crop corn to open 30 to 40 lower, new crop corn to open 6 to 12 lower and for beans to open 12 to 20 lower in old crop and 3 to 7 lower in new crop. 

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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