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

Class III and cheese futures started off the shortened week in a choppy fashion. A bearish technical posture and a rather uneventful GDT auction put some mild pressure on prices early, but that subsided around spot. Fresh buy interest during the spot session helped bolster nearby futures, while what appears to be renewed long-term commercial hedge interest helped underpin the market out back. Still, prices closed largely mixed  on good volume, particularly for cheese. More than 1,100 cheese contracts traded hands yesterday. Class III volume was just ahead of that, and we might be witnessing the moments of cheese surpassing and even eventually replacing Class III.

Dry whey futures also posted impressive volumes, and were largely mixed. The fundamental picture is still bearish on dry whey. That being said, buyers see value in a sub-35¢ market.

Butter futures started the week on a softer note. Stability during spot is not stirring buyer worry on the forward curve. In fact, stability is helping to moderate price activity and lead to some weakness for futures. NFDM, on the other hand, saw its first spot market price increase since Dec. 19. With spot up 0.25¢/lb., futures saw a reprieve from the recent bout of sell-side pressure that brought most contracts to new lows late last week. NFDM volume is just shy of 100 contracts yesterday, but fairly widespread activity through all of 2015.


Jan. 20 spot session results:

Block cheese: $1.4750 (up 0.5¢)

Barrel cheese: $1.4450 (down 0.5¢)

Grade A NFDM: 95.25¢ (up 0.25¢)

Butter: $1.5500 (unchanged)


Today's expectations:

• Dairy markets to open firm


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