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.
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.