Wednesday's CME Dairy Market Recap

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


Class III Futures

The sell-off in milk futures continued Wednesday as Class III settled 19 to 37 cents lower through the end of the year. Shortly after the spot market futures fell sharply. Some contracts traded over 50 cents below Tuesday’s settlements. Class III recovered to settle lower, but avoided the possibility of a huge decline. Cheese futures slid down across the board Wednesday. The Q3 average settled at $1.9393 (DOWN 0.0493). The decline in these markets is still considered a correction. Technical indicators showed Class III futures to be overbought. The market is now retreating towards a more normal range.

 

Class IV Futures

The Class IV market continued to fall Wednesday after another bearish spot butter session. Contracts settled 33 to 46 cents lower, but like the Class III market, they traded much lower before receiving a small amount of support. Butter futures plummeted further Wednesday, settling down the limit through the end of the year. This bearish market could be a correction due to the significant spread between domestic and international prices.

 

CME Spot

Wednesday’s spot cheese market moved slightly lower. Cheddar blocks traded six times and cheddar barrels traded once. The market saw a greater number of buyers due to its current price level. Four different buyers bought blocks during the spot session. The spot butter market only had one seller Wednesday. The offers were dropped lower and lower until two loads traded at a nickel below the market.

 

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



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