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

The story of last week was the dairy futures’ inability to rally despite higher spot cheese pricing. On the week blocks were up 2¢, while barrels gained 0.5¢, while the February Class III contract lost 64¢ and the Q2 2015 pack average fell 59¢. The physical market seems to have plenty of blocks to offer, while barrels seem a bit tight.  

Cheese futures closed the week mixed, with February through June lower, but July through December were higher. February lost a whopping 6.2¢, settling at $1.5170/lb., while the Q2 2015 pack was down 5¢, settling at $1.5690/lb.

 Dry whey futures were mostly lower throughout the week and closed mostly lower on Friday, as well. January settled up, but that was the lone contract to post a gain. We’ve heard chatter of lactose prices falling into the 20s in some places, and that doesn’t bode well for whey pricing.

Class IV futures closed out the week steady to lower on moderate volume. February futures closed 46¢ lower on the week, following the Class III market to the downside.

NFDM futures closed out the week lower on extremely heavy volume. With butter prices finding some stabilization, it may mean additional Class IV production, and that leaves little doubt that it would be bearish for the powder market.

Butter futures finished the week higher on good volume. Buyers seem to be ready to step in at current prices, seeing good value after the record high prices seen in 2014.


Jan. 9 spot session results:

Block cheese: $1.5900 (up 1.0¢)

Barrel cheese: $1.5450 (unchanged)

Grade A NFDM: 98.75¢ (down 1.25¢)

Butter: $1.5400 (unchanged)


Today's expectations:

• Class III to open modestly lower.

• Cheese futures to open lower

• Dry Whey futures to open mixed

• Class IV futures to open lower


Grain futures

Last week was relatively tame in terms of price movement, as the market set itself up for USDA releases of annual Crop Production and quarterly Grain Stocks reports this morning (Jan. 12). Given the wide range of ideas on total acreage, and the fact  stocks have been all over the place the past few years due to increased private storage, this one could provide a shocker in either direction. Look for analysis shortly after the 11 a.m. (Central) release.


Today’s expectation:

• Corn and soybean futures to open modestly lower.


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