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


Class III milk futures saw red across the board, with futures settling anywhere from +1¢ to -20¢ on the day. Regardless of today’s move, futures’ trading has been range-bound, with the first-half pack trading within a 25¢ range since Nov. 1.  

Mixed fundamental news should keep the market in a state of flux in the near term. This “tug-o-war” should continue through the beginning of December. While U.S. prices have become more competitive internationally, there’s plenty of milk available around the globe, so do not expect U.S. exports to ramp up anytime soon. We’ll look for any changes in market sentiment, but as of today the bearish bias is still building.

Class IV futures took a dive on the back of a lower spot trade from Butter and NFDM. The 1Q 2015 pack average lost 15¢ to settle at $15.47/cwt., while the 1H 2015 average lost 7¢ to settle at $15.40/cwt. 

Spot butter lost 3¢ to settle at $1.99/lb. Futures markets saw some selling pressure. As we move into December, one would imagine we could see more of a drop in pricing as domestic prices look to close the spread with global prices.

NFDM continues to sink on the spot market, and futures contracts put in new lows. We do not see an end in sight.

The CME is closed Thursday-Friday, Nov. 27-28, for the Thanksgiving holiday.


Nov. 25 spot session results:

Block cheese: $1.7300 (unchanged)

Barrel cheese: $1.7050 (down 1.5¢)

Grade A NFDM: $1.1175 (down 2.25¢)

Butter: $1.9900 (down 3.0¢)


Today's expectations:

• Class III & Cheese futures to open steady to lower

• Dry Whey futures to open steady

• Butter, NFDM & Class IV futures to open steady to lower


Grain futures

The grain complex got a pre-holiday boost in what continues to be a very choppy trade. CBO data is projecting a 900,000 acre reduction in U.S. corn plantings for 2015, with yields pegged at a healthy 167.3 bushels/acre, keeping U.S. stocks near 2 billion bushels next year. Soybeans were led higher by December soymeal. Strong U.S. exports and light soymeal pipeline supplies continues to be supportive.


Today’s expectation:

• Grain futures to open mixed


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