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

Class III Futures

Other than the 34¢ sell-off in December, the Class III market looked relatively supportive on Monday. Jan – Aug contracts settled 1 to 9 cents higher. Volume was very light as only an estimated 983 contracts were traded on the Globex platform. Seeing spot cheese slightly above $1.7000/lb has sparked some interest on the buy side of the markets. Fundamental factors still show that more of a sell off is on the way, but after paying over $2.0000/lb for cheese for many months these new price levels have brought buyers back to the market.

Class IV Futures

Class IV contracts moved higher with choppy volume Monday. Dec – Jun contracts settled unchanged to 9 cents higher. The rise in spot butter has provided some support to the front months in butter futures. The lack of sellers in the spot market could mean that this rally is short lived, but it has been help Q1 butter futures hold at around $1.7000/lb.

CME Spot

Monday’s spot session was relatively quiet. No markets were made for cheddar blocks. Cheddar barrels were offered down two cents from Friday’s settlement price, but buyers were not interested. One load of butter traded after a lone bidder brought the market two cents higher.

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