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

Class III Futures

After seeing a strong buying presence in the spot cheese market Friday, Class III futures rallied across the board. Contracts settled 3 to 25 cents higher through the end of the year. Cheese and whey futures both had slight increases on very light volume. The grain complex had a very bearish day as corn and soybean meal futures sold off in all months. December corn settled at $3.6225 /bushel (DOWN 0.0475). These movements in the milk and grain markets continue to provide dairy farmers with a great window to hedge.

Class IV Futures

Friday’s Class IV market was extremely quiet with very few trades. Butter futures were the only source of excitement as they pushed higher in the front months and in the latter half of 2015. The Aug – Dec contract average settled at 2.1295 (UP 0.0115). The USDA Dairy Products Report released Friday showed us that butter production continues to lag.

CME Spot

The spot cheese market had a strong buyer presence as bids pushed the market back to $2.0000 in both the blocks and barrels. This week has been bearish in all three spot markets. Butter has taken the biggest blows as the weekly average price settled at $2.4810 (DOWN 0.1030). The weekly average prices for spot cheddar blocks and barrels dipped 3 and 5.9 cents respectively. If we continue to see strength like we saw Friday these prices could rebound.

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