Dairy markets: Near-term Class III lower

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

Near-term Class III futures traded lower, with the Q2 2014 pack settling at $19.87/cwt. The April contract took the largest loss on the day, down 59¢. H2 2014 contracts were mixed for the most part, down 3¢, to $18.96/cwt. While the move was more towards the downside, it will take more than one session to prove this is an overall change in trend. Cash Blocks settled up, but the Barrel market was offered down 4¢. Cash cheese futures responded in kind. Cheese production could be increasing from more available milk in many parts of the country. Whey markets were very quiet.

The Q2 2014 Class IV market had the most action – along with the largest losses on the day – settling at $22.10/cwt. Weakness in both Butter futures and NFDM led the Class IV down. Today’s trade will let us know if we are in a correction phase, or a trend change. Spot butter trading went unchanged, leaving the futures market undecided.

FC Stone's annual Dairy Outlook Conference will be held June 18-19, in Chicago. Visit www.intlfcstone.com/events for information.

 

March 3 spot session results:

Block cheese: $2.225 (up 0.5¢)

Barrel cheese: $2.20 (down 4.0¢)

Grade A NFDM:  $2.04 (down 1.25¢)

Butter: $1.88 (unchanged)

 

Today's expectations:

• Class III & Cheese to open lower

• Dry Whey to open steady

• Dry Whey to open soft

• Class IV, Butter & NFDM to open slightly lower

 

Grain futures

Grains were wild yesterday on the back of Ukrainian situation. The wheat market took off, and corn and beans followed, despite a higher U.S. Dollar and much higher crude oil prices. Corn futures eventually gave up a good portion of the gains. Weekly export inspections were friendly to the rally. Soybeans on the other hand, found little or no support to keep prices elevated into the close, with export inspections below the same time last year.

 

Today’s expectation:

• Corn to open lower

• Soybeans to open mixed

• Soybean meal to open higher

 

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