AM price moves: USD -0.0178 @ 79.815, Euro +31 @ 1.3135, Crude +0.46 @ 103.16, Copper +0.0415 @ 3.6810, Gold -3.6 @ 1,655.4, Dow futures +26 @ 12,770, S&P +4.90 @ 1,368.90, NZ Dollar +38 @ 0.8173, Yen -18 @ 1.2350, Canadian +39 @ 0.9984
- European stocks steady except for P=Portugal which is down 2%- if it’s not one PIIG it’s another
- Eurozone industrial production up 0.5% in Feb
- China’s new Yuan loans surge (1 trillion Yuan) as money supply ramps up
- World bank cuts it’s China 2012 growth forecast
- Today’s reports and the week ahead at a glimpse:
4/11 Class III Futures: Volume: 1,342 Open Interest (OI) Change: +208 Total OI: 27,620
4/11 Class III Options: Est. Put Volume: 390 Total OI: 36,781 Est. Call Volume: 553 Total OI: 33,730
4/11 Other Dairy Futures Volume: Butter: 77 Dry Whey: 100 NFDM: 18 Class IV: 2 Cheese: 146
4/11 Individual Class III Futures Prices, Change, Volume & Open Interest
April 12 $15.64 DOWN 4 Vol: 93 OI Change: DOWN 23
May 12 $15.36 DOWN 48 Vol: 447 OI Change: UP 34
June 12 $15.30 DOWN 33 Vol: 214 OI Change: UP 47
April to June Class III Avg. $15.43 Down $0.28/cwt.
April to June Class IV Avg. $14.88 Unchanged
Dairy: Class III and Cheese
The class III market jumped back to life yesterday, as traders rattled off 1,340 trades in a mostly negative session- along with the now long standing trend of higher volume yielding lower prices. Prices started the morning quietly to the down side before nose diving into the afternoon. Near dated contracts took the brunt of the selloff as the May to July contracts fell between 24 and 48 cents. All was not lost for the bulls though, as prices bounced back after the pit session ended, removing big chunks of their earlier losses, and closing out the trading day in a more supportive fashion. The spot session was of little help to those trying to decipher market sentiment, as no activity of any sort was seen. The cold storage report presented the market with a .7% draw down in stocks from last week, which was seen as slightly bullish. The Dairy Product Sales Report was not so kind as the Cheddar blocks price gained .4 cents to $1.54, but the barrels fell 4.8 cents to $1.54. The cheese futures were active in response to all the news, trading a total of 146 contracts, with settlement prices moving mostly lower, ranging from unchanged in the year end months to down 3.3 cents in June. The class IV market did little on the day, with only two contracts traded. We look for volatility to push us to close out the week, as traders try to make sense of conflicting technical and fundamental setups.
Overnight Class III started off significantly higher, by as much as 32 cents in May. By morning 25 trades occurred, April was still up a large 19 cents but all other months have returned to a more tempered pace of steady to 3 higher.
The AMS released its second National Dairy Products Sales Report with the following results. Of note was a revision to last week’s dry whey price. Last week’s whey price was increased by four cents.
We look for milk to open higher
NFDM, SMP, WMP:
The nonfat market posted a little activity yesterday with only 17 total trades occurring, but nothing in the way of a price change. Even the drop in national sales price did little to motivate market participants to act on the news. Last week’s release had the NFDM sales price at $1.2965, but was revised down to $1.2747, making for a less significant loss on the current report. With rumors of physical product moving at substantially discounted prices to the futures, one would think a selloff is in order, but the futures markets have been stuck in a sideways trend over the past couple of weeks. The trend has is usually your friend, but we see the nonfat breaking form, and drifting lower in coming sessions as cash and futures should converge.
We look for NFDM to open steady to lower.
The butter market held strong in price yesterday resisting pressure applied by the selloff in Class III to push higher on the day. Prices ranged from unchanged in the fourth quarter, to up 1.250 cents in August. It seems all the recent reports of continually increasing milk production has done little to sway the butter to fall as one would think based on the fundamentals of the market; attribute much of that to increased storage. The release of the cold storage report for April 9th showed butter stockpiles increasing 5.7% over last week, but that didn’t phase the bullish sentiment of the day. Common sense would lead one to believe that all the extra milk production would be pushed towards butter and powder products, thus leading to a collapse of current support, but common sense is not always prevalent in the futures markets. We still look for weakness as the most likely scenario over the next 7 trading sessions.
We look for butter to open steady.
The whey market was the volatile one of the dairy complex having pushed near limit down in many of the front months only to settle with slight loses by the afternoon. The spark of buying interest came courteous of the release of the Dairy Products Sales Report. The whey price was listed at 61.3, a gain of 1.9 cents over last reporting. Maybe more telling and influential was the revision of the prior week’s price to four cents higher than previously reported. This news sparked a surge of trading as 100 total contracts changed hands on the day. We look for support to remain over the next few trading sessions, resulting in higher prices.
We look for whey to open steady.
A choppy day in the grain complex, as the session started with pushes lower in the beans, corn, and wheat. The grains, however, battled back from their intraday lows as traders book profits gleaned from the negative sentiment brought about by the recent USDA reports. May corn settled 1 ¼ cents higher at $6.36, while the wheat closed 2 ¼ cents higher at $6.28. The soybeans were the losers on the day, closing out down 4 cents at $14.22. More volatility is in store, as the historic pace of the early plantings should continue to weigh on the grain complex. At this point, only an unexpected weather event or major spikes in demand seem likely events capable of reversing the short term negative bias of the markets.
We look for corn to open 1 to 3 higher, for beans to open 4 to 7 higher, for meal to open 2.2 to 2.8 higher and for wheat to open 1 to 2 higher.