Class III futures were able to recover after slight losses on the spot cheese market temporarily put to bed fears of another massive hit like the one dealt out on Tuesday. The December Class III contract close 43¢ off its intraday lows, closing up 18¢, at $18.88/cwt.

Moving forward, what are the implications at play? Fundamentally, we hear fresh cheese is more available in the country this week versus last (and there was cheese available last week). The US Dollar index continues to ramp into territory not seen since 2010, which has and will continue to curb exports. Margins are still attractive enough to encourage production; EU product continues to look for a home as the Russian ban takes its toll and the removal of quota looms in April 2015; and international prices continue at levels discounted to our domestic levels.

Cheese futures finished mixed yesterday on strong volume. Blocks and Barrels shed a penny. Dry whey found traction and posted gains through mid-2015.

Class IV futures posted mixed results yesterday as it tracked nearby strength in the NFDM market. The stabilization of the NFDM spot market has recently featured active buy-side interest, which contributed to yesterday’s bounce higher in nearby NFDM futures. However, spot prices for butter continue to probe lower, slipping sub-$2.00/lb. for the first time in over a week. Nearby futures took the move largely in stride and held near unchanged into Q2, however weakness rippled through the balance of the year, with mostly lower settlements into Q4.

Butter: $1.9900 (down 1.0¢)

Today's expectations:

• Class III, Cheese & Dry Whey futures to open mixed

• Butter & Class IV futures to open mixed

• NFDM futures to open steady to higher 

Grain futures

Volatility and whipsaw price action permeated through the grain trade yesterday after Tuesday’s strong upside showing took the markets by surprise. Bullish sentiment shifted in the soybean complex, as sellers who pressured the market sharply lower.

On the other hand, both corn and wheat tacked on additional upside premium on weather fears and short covering. A foot of snow on the ground doesn’t do much in the way of harvest progress as far as corn is concerned, while cold temperatures in the Plains, as well as in Russia, are threatening the wheat crop.

Today’s expectation:

• Grains to open modestly higher

Nov. 12 spot session results:

Block cheese: $1.9900 (down 1.0¢)

Barrel cheese: $1.9375 (down 1.0¢)

Grade A NFDM: $1.1775 (unchanged)

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