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

Class III Futures

The Class III market pumped its brakes Friday, after a long bullish run contracts sold off 1 to 19 cents Aug – Apr 2015. Volume was extremely light as an estimated 715 contracts traded on Friday. Cheese futures were relatively flat with a bit of bearishness in Q4. The Q4 contract average settled at $1.9300 (DOWN 0.0183). Dry whey futures had a bullish day in the front months as Sept – Dec contracts settled 0.0250 to 0.8500 cents higher.

Class IV Futures

Butter futures continued their strong rally again on Friday as futures try to converge upon the spot market. Sept – Nov contracts settled up the limit (UP 0.0500). NFDM futures continue to sell off as the Sept – Dec contract average settled at $1.4906 (DOWN .0163). Class IV futures dropped in the first half of 2015 as the Jan – Jun contract average settled at $17.75 (DOWN 0.14). Light volume could cause this move to be misrepresented, but with bearish NFDM futures and U.S. butter prices still at a huge premium to the international market all signs point to lower Class IV prices for 2015.

CME Spot

Cheese buyers were active again Friday, moving blocks up three cents and barrels up a penny and a half. NFDM had another strong sell off as the market moved two and a quarter cents lower. Butter traded 13 times but the settlement price was unable to advance or decline. Weekly averages show spot cheese up an average of 3% vs. last week with lighter than usual volume. NFDM had a weekly average 7.2% lower than last week due to increased selling pressure. Butter finished out with a weekly average 5.5% higher with a weekly volume of 59. The butter market was extremely strong this past week as buyers continue to indicate that there is still a bit of a supply shortage for the time being.

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