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

Another round of spot cheese selling quelled a Class III futures rally. December 2014 Class III stalled out and retreated back to $18.70/cwt., down 18¢ by the closing bell.

The spot cheese market resumed selling pressure yesterday and found some buyer interest in the mid- to low-$1.90/lb. level. We expect congestion and trading to occur above $1.90/lb. However, that price weakness will eventually overcome bids and spot cheese prices will cut decisively into the $1.80/lb. territory, a price we haven’t seen since December 2013. 

Cheese futures finished Thursday mixed on more moderate volumes. The January-December 2015 price average settled at $1.7407/lb., with continued broad-based activity spanning through December 2015.

Dry whey prices traded higher through July. The mid-40¢ range has emerged as level of equilibrium for the 2015 price average, and we expect that to maintain for the time-being.

NFDM futures settled the day anywhere from unchanged to +1¢.  A slight gain in spot Grade A may have lent a bit of support in what remains an overall bearish market. Weak international prices and drying exports continue to weigh on this market.  Commercial users remain on the sidelines and any buying remains “hand to mouth.”

 Butter futures traded and finished mostly mixed. The recovery bounce that brought spot butter back over $2.00/lb. has faded.  We expect more spot butter selling today and into next week.  Currently, the 2015 butter pack is trading at $1.7460/lb., slightly off its 60-day high of $1.7628/lb.  As the market cools ahead of Thanksgiving, futures look to continue sideways to slightly higher.

Nov. 13 spot session results:

Block cheese: $1.9425 (down 4.75¢)

Barrel cheese: $1.9150 (down 2.25¢)

Grade A NFDM: $1.1800 (up 0.25¢)

Butter: $1.9875 (down 0.25¢)

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

The corn market pushed to new highs, but seems to be running out of steam. Lower prices triggered new demand, but the speculative interest that capitalized on rail logistics – and really underpinned most of this rally – may be tiring. Overnight corn was down 2¢ and we expect a bigger end-of-the-week selloff. 

Soybeans pushed higher yesterday, but failed to take out the recent high. Demand for soybeans/meal is high right now, as it should be this time of the year. But bean and bean meal prices look tired at current levels, as well. Having stirred end-users into a mild depression, their job of rationing for strong demand and rail issues looks to be about over. Prices fell overnight and we expect to see more “red” for prices in the coming days.

Today’s expectation:

• Grains to open lower

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