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

Class III Futures

Monday’s overnight market brought Class III futures slightly higher coming into Tuesday. After seeing more aggressive buying in the spot cheese market futures were off to the races. The August and September contracts rallied to settle at new highs. Oct – Dec also showed strength, settling 5 to 23 cents higher. The 2015 contracts did not have a lot of volume Tuesday, but during afternoon trading they began to rise slightly, especially towards the end of the year. Cheese futures rallied in the front months, settling 2.9 cents higher in Sept, but showed weakness in the deferred contracts. Dry whey futures had quite the opposite day as the front months sold-off slightly, but the deferred contracts made some bullish movements.

Class IV Futures

Another strong day in the spot butter market boosted butter futures further higher on Tuesday. The September contracts settled up the limit at $2.4300 (UP 0.0500). The Aug – Dec contract average settled at $2.1741 (UP 0.0301). The strength in butter futures was not very evident in the Class IV market. Class IV futures moved slightly higher in some months, but it seems that the weakness in the NFDM market has been holding it back from any price increases.

CME Spot

Tuesday’s spot cheese market had a strong buying presence with very little seller activity. Three cheddar blocks traded as the market rose two cents higher, and no cheddar barrels were offered as bidders drove the price up a penny and a half. The NFDM market had more aggressive selling as a pair of sellers offered products lower and lower bringing the market down two cents. The butter session had multiple buyers fighting over product as six loads traded and the market settled two cents higher.

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