Daily Reports
USDA grains report has big impact
Wednesday night, Class III was actively traded and prices held firm. At 7:30 a.m. CST Thursday, the USDA released its quarterly report and it was a big giant bear, sharp-clawed bear of a report for the grain markets. At the release time, grain futures were closed but milk futures were open. Milk almost instantly flipped form positive to negative in price. Corn was quickly called to open limit-down as it began trading there on OTC desks all around.
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Cheese edges higher, fueling futures rally
Class III trading took off Thursday with 1,827 total contracts changing hands as we continue to move away from the holiday lull. The front month January 2012 contract gained 10 cents to settle at $17.19, while the biggest gains took place in the remaining first quarter months. Feb 2012 jumped 29 cents to $17.60, while March 2012 pushed higher 32 cents higher to settle at $17.76.
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Blocks up, barrels down: Cheese is in balance
We have seen some speculative buying following the headlines of milk being the best-performing commodity of 2011, but the industry seems a bit more bearish than anything to us.
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Block cheese unchanged at $1.5625
A very slow start to 2012 for the dairy futures market as most of the volume and price movement came early in the session, with nearby months jumping higher on stronger grain prices, a lower dollar and stronger outside markets. Each of the first quarter 2012 months traded to double-digit gains, but then the spot session closed quietly with no activity.
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2012 dairy price uncertainty in forefront of discussions
In 2011, Class III was the best performing commodity; meaning year over year it increased in value more than any other product. There are many reasons for this. Everyone will point first at the record exports, and those are a dominating factor. But there were additional causes — domestic demand was strong as well.
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Class III consolidates as butter gets technical bounce
Yesterday’s news de jour was outside the dairy arena. Early Wednesday morning, we got word of the European Central Bank offering a new bank-funding program that was well received. A total of 523 banks took €489 billion (over $680 billion U.S. dollars) of the new three-year loans — well above the €310 billion expected by those polled earlier.
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Block cheese unchanged at $1.5625
Tuesday was marked by another moderate trading session, with futures closing modestly higher on 1,278 traded contracts. The USDA Milk Production report was likely a non-event for the trade yesterday. Instead, the leading factor for Class III support was another firm trade for the dry whey market. Still, Class III futures closed off their highs showing us some level of technical headwind and a vulnerability to trade the downside yesterday.
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Milk Production report generally seen as neutral
Class III futures volume reached over 1,200 contracts, though watching the market it certainly didn’t feel like a heavy volume day. Prices rallied early, but lost steam after a steady spot market. Although spot buyers appeared to have carte blanche to push spot prices higher because no offers showed, they chose not to and that helped to take some of the steam out of futures buyers. Open interest in January fell once again and, outside of the seemingly perma-firm dry whey market, the Class III market appeared to falter some going into the Milk Production report.
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Sharp and swift bear bounce for Class III on Friday
An interesting end to the week for Class III, as the spot market continued to decline and January suddenly saw significant buy side pressure to close the week. Short covering was likely a major factor Friday, as open interest in January declined on the increase in price. The big gains and potential margin calls may encourage some additional short covering early this week (strong volume and Jan up as much as 14 cents Sunday night), but ultimately this does not appear to be new buying interest — and that type of rally usually fades quickly.
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How long will the $2 cheese market last?
The spot cheese market caught fire again yesterday climbing by over 4 cents in each the block and the barrel, pushing each up to and above the $2 mark and that’s right where the blocks stopped.
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$2 Cheese predictions may be playing out
What began as a mostly quieter choppy trade for Class III last week ended on a firm note on Friday. One thousand contracts traded hands with 690 of those trades reserved for the November and December contracts alone, which finished up .06 and .39 respectively. But futures pushed higher into Q1 of 2012 despite technical resistance.
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