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

CME Spot Price ($/lb.) Daily Change (₵/lb.) CME Futures Price ($/cwt) Daily Change ($/cwt)
Cheddar Blocks  $  1.9550 - 1.25 Class III (August)  $ 20.66 + 0.08
Cheddar Barrels  $  1.9850 N.C. Class III (Oct - Dec) average  $ 19.84 - 0.01
NFDM  $  1.7725 N.C. Class IV (August)  $ 22.46 N.C.
Butter  $  2.3950 + 0.25 Class IV (Oct - Dec) average  $ 20.26 - 0.01

Class III Futures
Monday’s Class III futures market was very flat with lower than average volume. Whey futures settled a half penny lower in September – November, but Class III futures were unaffected. The Class III August and September contracts settled eight and one cent higher respectively. Q4 & Q1 2015 contracts settled one to six cents lower. An estimate 849 contracts exchanged hands on the Globex platform with some decent volume going through the end of 2015. Corn and soybean meal futures continued to fall Monday perhaps prompting producers to lock in a margin with $18.00 – $18.75 Class III prices.

Class IV Futures
Only four months had trades during Monday’s Class IV market. The October contract settled at unchanged, but moved to $20.95 (UP 0.21) during afternoon trading.  Butter futures settled a penny lower in August, but on very light volume.

CME Spot
The spot cheese market continued to see a good number of buyers Monday. Three buyers bought six cheddar blocks from two different sellers. Spot cheese prices are still at a slight discount to cheese futures, but as we still see good buyer participation in the spot market the gap shouldn’t widen much further. Monday’s spot butter session had loads offered right on the open. Offers moved lower and lower until buyers picked up loads two cents below the Thursday’s settlement. The market finished half a penny higher after five loads traded. Spot butter is still at a significant premium to futures. The recent USDA Dairy Products report showed that butter production continues to lag versus last year and buyers are filling their immediate needs as we enter the typically supply-deficient 3rd quarter.


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