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

Class III Futures

Class III futures bounced back Thursday receiving support from a bullish day in dry whey futures. Class III contracts settled 3 to 16 cents higher through July of 2015. Volume was light on the Globex platform as an estimated 1,565 contracts traded. Dry whey futures rallied to settle higher across the board. The Oct – Dec contract average settled at 61.7083 cents (UP 2.7000). The Q1 2015 contract average settled at 54.9083 cents (UP 2.1333). Cheese futures moved slightly higher in the front months after a supportive spot cheese market. Spot prices still remain at a significant discount of futures.

Class IV Futures

Thursday was another very quiet day in the Class IV market. The August and September contracts settled 26 and 20 cents lower respectively. The front months continue to reject the highs that they recently achieved. Butter futures were also very quiet Thursday. The spot butter price is down 15 cents this week which has caused some converging moves between spot and futures.

CME Spot

The spot cheese market had a strong buying presence as multiple buyers pushed the price of cheddar barrels four cents higher. Two cheddar blocks traded, one at $1.9850 and the other at $1.9775. This buyer interest did not spill over into cheese futures, but it did slightly narrow the gap between spot and futures. The NFDM and Butter sessions were both seller dominated. Sellers dropped their offers looking for bids in both markets. NFDM did not trade, but three loads of butter traded before the price settled at $2.4400 (DOWN 0.0300).

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