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

Class III Futures

After Thursday’s massive sell-off the bearishness continued in Class III. Oct – Dec contracts settled 3 to 22 cents lower. The 2015 contracts continued to hold around the $17.00 range keeping the forward curve relatively flat through the end of next year. Cheese futures took another hit on Friday as the Nov contract settled at $2.0250 (DOWN $0.0280). This downward trend is expected to continue, but with relatively low inventories we should begin to see commercial buyers step in to provide support to the market.

Class IV Futures

The collapse of the butter and NFDM markets have brought a black cloud over Class IV. Trading was mottled with very few trades across the board, but the strong decline in spot prices for both butter and NFDM have placed a lot of downward pressure on the market. Cold storage inventories are also low in butter so there is no need to hit the panic button, but the downward trend has not yet shown any indication of support.

CME Spot

Cheddar blocks made their way to the CME once again on Friday. A block was offered down to $2.1400 before being purchased. Cheddar barrels took a hit as sellers dropped offers, but no bids were posted. NFDM was the same story as a lone seller offered a load down, but found no bids. The butter session had a strong selling presence as buyers sat back and bought 9 loads as the market slid lower.

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