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

Class III Futures

A strong cash cheese market continued to provide support for Class III futures Thursday. Class III futures settled 3 to 21 cents higher Aug – Nov, 2014, but 3 to 10 cents lower Dec – June 2015.  Volume in cheese futures was relatively even across all the months through the end of 2015. This could indicate that there was a bit of cheese hedging taking place Thursday. Whey futures kept their rally alive by pushing higher in most months. The Aug – Dec contract average settled at 65.1700 cents (UP 0.5200).

Class IV Futures

A very bearish day in NFDM futures placed some downward pressure on Class IV futures Thursday. The Class IV market was extremely quiet with only a handful of trades. The August contract settled 6 cents higher, but Sept – Jan 2015 settled 2 to 28 cents lower. Butter futures moved slightly higher in the front months after another supportive spot butter session, but the deferred contracts slid lower.

CME Spot

Thursdays spot market showed us more of the same. Cheese buyers pushed prices higher, NFDM had more aggressive selling, and nine loads of butter traded without a change in the settlement price. Cheese futures are at about a nickel premium to the spot market. Spot butter is now at a slight discount to futures after Thursday’s pop in butter futures.   

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