Dairy market recap: Bearish futures in Class III and IV

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Editor’s note: This market commentary is provided by Curtis Bosma at HighGround Dairy in Chicago, IL.

Class III Futures
Bearish was the tone throughout the CME Wednesday as cattle, grains, energies, and milk futures all traded lower. Class III futures experienced a big sell-off In Q4 and Q1 of 2015. The September – December contracts settled 30 to 38 cents lower. Cheese futures fell in along with Class III settling 3 to 3.6 cents lower through the end of the year. Whey futures were steady to slightly higher Wednesday, but after the release of the National Dairy Products Sales Report they rallied trading as high as 68.0750 cents (UP 3.3250) in August during the afternoon market.

Class IV Futures
Class IV futures also sold-off Wednesday on light volume. The September contract settled at $21.35 (DOWN 0.30). NFDM futures also had a bit of a bearish day settling almost 2 cents lower in August and September. Butter futures continued to trend downward. The October – December contract average settled at $1.9391 (DOWN 0.0236). Class IV has begun to trade below its support level over the last few days which could indicate a breakdown in the market. 

CME Spot
The spot NFDM and butter markets were very quiet Wednesday, but the cheese buyers were active again on as nine cheddar blocks traded to five different buyers. The spot cheese market continues to show signs of support at its current price level.

 

Disclaimer:  The risk of loss in trading futures and options can be substantial.  Past performance is not indicative of futures results.



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