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

Class III futures took it on the chin. Spot cheese was led lower by barrels, while blocks went unchanged. We will be looking to see how the spot market moves today and look for a narrowing of the price gap between block and barrel prices. How they correct will determine how the trade ends the week. With talk of cheese being available and milk being moved around looking for a home, we will continue our bearish stance over the medium-term.

Class IV markets put in a mixed session. SMP and WMP prices continue to lose ground overseas, but the spread between the prices is much narrower. We still look for the NFDM market to lose ground over the medium-term, but given that the market has been oversold for so long, we could get a bump in the futures over the next couple of weeks.

 

CME Class III Futures, Dec. 4, 2014

 

 

 

Daily

 

Close

Change

Month

($/cwt.)

(¢/cwt.)

Dec. 2014

17.77

-8

Jan. 2015

16.18

-42

Feb.

15.67

-35

March

15.80

-23

April

15.94

-12

May

16.23

-12

June

16.47

-10

July

16.62

-5

Aug.

16.90

-6

Sept.

17.10

2

Oct.

17.10

-5

Nov.

17.05

-1

Dec.

16.98

-2

 

Dec. 4 spot session results:

Block cheese: $1.6600 (unchanged)

Barrel cheese: $1.5500 (down 3.0¢)

Grade A NFDM: $1.1100 (unchanged)

Butter: $1.9850 (unchanged)

 

Today's expectations:

• Class III, Cheese & Dry Whey futures to open steady to higher

• Class IV futures to open steady

• Butter & NFDM futures to open steady to slightly higher

 

Grain futures

Better-than-expected export data was the ammunition needed to move the grains higher. March Corn settled out up 7.75¢, to $3.8975/bushel; and January Soybeans settled out up 12.25¢, to $10.1050/bushel.

 

Today’s expectation:

• Corn & Soybean futures to open lower

 

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