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

Class III Futures

The Class III market saw a soft rally following Monday’s spot cheese market. Front months settled mixed, Oct-Dec settled 10 cents lower to 11 cents higher. The first half of 2015 made a steady, but short-lived, climb to settle 6 to 18 cents higher. Cheese future posted similar results as Nov settled at $2.1130 (UP $0.0160), and the Jan – Jun contract average settled at $1.7730 (UP $0.0048). The USDA’s Sept Milk Production report showed that domestic production was 4.0% higher than last Sept. This may initially seem bearish, but is relatively neutral to market expectations. Analysts have been talking about this increase and the market’s reaction during the afternoon trading was neutral as predicted. 

Class IV Futures

The slight increase in the spot butter market may be a sign of support, but market participants were uninspired and only a handful of trades occurred in Class IV, butter, and NFDM. Nov butter traded higher to settle at $1.9500 (UP $0.0300), but Dec and Jan had no volume on the day.

CME Spot

Cheddar blocks and barrels were bid up in tandem Monday settling 3.75 cents higher in both markets. Still no offers in the block market, but one barrel was sold at $2.1100 before another was offered at $2.1075. The NFDM market saw some aggressive selling on Monday as a lone seller chased bids that were posted well below the market. Two loads traded as the market fell six cents. The butter session had equal pressure from buyers and sellers as the market settled a penny and half higher after 12 loads traded.

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