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

Class III Futures
More bullishness came during Tuesday’s Class III market as cheese prices continued to provide support. Aug – Oct contracts settled 18 to 26 cents higher and continued to rally even higher during afternoon trading. The September contract has risen back to where it was about a month ago which has put it within its predicted technical range. Cheese futures traded higher after the spot cheese session showed more of the buyer activity that we have been seeing lately.

Class IV Futures
Butter continued its full throttle rally Tuesday as contracts settled up the limit in August and September (UP 0.0500).  The Oct – Dec contract average settled at $1.9683 (UP 0.0303). This came after another bullish day in the spot butter market. Class IV futures reacted by settling 15 to 25 cents higher in Aug – Oct. The Nov – Jan 2015 contracts sold off slightly bringing more inversion to the Class IV market. As long as NFDM prices hold butter could continue push Class IV higher.

CME Spot
All three markets received support from buyers during Tuesday’s spot market. Two cheddar blocks traded, both a quarter cent higher than Monday’s settlement price. No cheddar barrels trades, but a steady bid provided a bit of support at the current price level. Butter continued its run in the spot market settling seven cents higher. No offers came in butter so the session was purely buyer driven. The rallies seen in spot butter and butter futures could still have some legs as the basis between the two markets is still relatively wide.


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