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

Class III futures prices traded in the tightest daily range in recent memory, with most months trading within a 20¢ range on the day. Volume was still very heavy. Settlements ranged from -2¢ to +5¢ through the end of 2015.

While the trend remains down, there is a bit of an argument to be made for a short-term bounce in the Class III six-month pack (January to June 2015), as prices have stabilized over the past several sessions. However, the spot market will need to give us a bit of a push to get there.

Dry whey prices continued their recent sell-off, with prices moving very near, in some cases just below their recent lows. It may be difficult for this market to regain its footing in the short term, as the outside markets continue to be mostly weaker.

The Class IV market was relatively quiet yesterday, with settlements mostly unchanged but slightly higher in December and the Q4 2015 months. Product prices have been a mixed bag of late. As we get nearer the holidays, the likelihood of a spot butter sell-off increases, but the market still seems to have good demand and the spot price is stable so far this week.

NFDM markets were mixed, but mostly higher yesterday. While we continue to hear a lot of talk of the possibility for a sub-$1.00/lb. spot price, futures have been bouncing back a bit of late, perhaps due to the spot market finding a little support and stabilizing over the past two weeks just above the $1.10/lb. level.

 

Dec. 9 spot session results:

Block cheese: $1.5800 (unchanged)

Barrel cheese: $1.4900 (down 3.25¢)

Grade A NFDM: $1.1100 (unchanged)

Butter: $1.9850 (unchanged)

 

Today's expectations:

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

• Butter, NFDM & Class IV futures to open mixed

 

Grain futures

Both corn and soybean futures prices were higher, finding some support from a strong soybean meal market, and some concern ahead of today’s USDA World Ag Supply & Demand Estimates report. We don’t look for much of a move based off the report later this morning, as no supply side changes will be made and USDA will likely await stocks data after the first of the year before making any significant changes to that side of the balance table. It’s getting harder to see any breakout of the current trading ranges for corn and soybeans until after the holidays.

 

Today’s expectation:

• Corn futures to open slightly lower

• Soybean and Soybean Meal futures to open slightly higher

 

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