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

After rallying through resistance levels Class III futures received a bit of a correction Wednesday. The Sept – Dec contracts settled 8 to 14 cents lower, and the Jan – June 2015 contract average settled at $18.18 (DOWN 0.04). The market is still very inverted as the 2015 contracts seem to be lagging. The USDA’s National Dairy Products Sales Report (NDPSR) from Wednesday showed that both cheddar blocks and barrels were sold at a higher weighted average price last week. This was no surprise to analysts as we saw large gains in the spot market and in the futures over the last week.

Class IV Futures

Wednesday was a bullish day on the Class IV side of the market as butter and NFDM futures made upward moves. Class IV futures settled 14 to 46 cents higher Sept – March 2015. Butter futures received a correction in the September contract, but settled slightly higher in Q4. NFDM futures made a strong rally Wednesday rallying 2 to 4 cents Sept – Mar 2015. The spot market continued to add support to the NFDM market as we may have found a bottom to the long bearish trend.

CME Spot

Cheese buyers were active again Wednesday as three cheddar blocks traded and the market settled a penny higher. The spot NFDM market had the most action that it has seen in a while as eight loads traded and the market moved 2.25 cents higher. This new support in the market could indicate that the market is moving off of the low that we started the week with. The spot butter session was mostly seller dominated as 10 loads traded at prices ranging from $2.7300 to $2.7400.

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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