Spot cheese closes down on CME

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

 The Class III market didn’t take its time in revealing its intended direction for the day after trading mixed, but mostly lower, overnight. Futures were under pressure throughout the morning and that pressure extended itself to the spot markets, as well.

Blocks closed down 2 cents on the day, while the barrels lost 4.25 cents. That sent August through December futures tumbling 8 to 37 cents on the day. The 2014 contracts were resilient, however, closing mostly higher from -3 to +4 as strength in 2014… dry whey futures provided some support. Volume was stronger than recent sessions, climbing near the 1,200-contract mark.

With the milk production report being slightly bearish, and a run of increasing stock levels seen on recent cold storage reports, there seemed to be no hesitation from sellers coming off of last week’s weather rally. This week, temps in the Midwest look to be backing off and the forecasts have Chicago barely topping 80 degrees for most of the week, which should allow Upper Midwest milk production to recover.

Spot session results:

Block cheese: $1.7275 (down 2 cents)

Barrel cheese: $1.6975 (down 4.25 cents)

Grade A NFDM:  $1.775 (unchanged)

Butter: $1.43 (down 6 cents)

In the grain complex, it was a mixed open to the week as both corn and wheat were under pressure from weekend rains, as well as cooler temps in the forecast for the coming week.

Dec. corn finished down 2.75 cents at $4.9800, while Dec. wheat was off 4 cents to $6.7125. The bean market was another story, however, as August beans finished higher by 29.50 cents to $15.2025. And new crop wasn’t too far behind, gaining 14.50 cents to $12.8850. Basis continues to be the story as prices hold firm physically and soybean meal closed limit higher, +20.0 per ton at $502.40.

This morning, we look for corn to open 5 to 8 cents lower and soybeans steady to 10 higher.

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