Monday'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

Buying interest in Sunday’s overnight market brought Class III futures higher going into Monday morning. Front months traded as much as 30 cents higher prior to the spot market. The very bullish spot cheese market provided fuel for an all-out rally in Class III futures. Contracts settled 11 to 37 cents higher through the end of the year. Cheese futures provided a great deal of support, settling higher through Feb 15. The Aug – Dec contract average settled at 2.0128 (UP 0.0304). Dry why futures also rose slightly Monday on light volume. The September contract settled at 67.8500 cents (UP 0.8500).

Class IV Futures

Butter futures moved higher in the front months to bring some long awaited convergence between futures and the spot price. Q3 contracts settled 0.5 to 3 cents higher as Q4 contract dropped 1 to 2.7 cents. Class IV futures settled mixed with very light volume. The August contracts settled at 22.94 (DOWN 0.07), as Sept and Oct settled 5 and 22 cents higher respectively.

CME Spot

Monday’s spot cheese market had a very strong buying presence.  Buyers jumped in front of each other and pushed prices higher and higher as sellers sat on their hands. Three cheddar blocks traded at prices ranging from $2.0100 to $2.0300, but bids lifted the market to settle at $2.0600 before the close. Three cheddar barrels traded at prices ranging from $2.0500 to 2.0900. The spot butter session was the only other source of action Monday as four loads traded at prices ranging from $2.3850 to $2.4000 and the market settled unchanged.

 

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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