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

Class III Futures

An overnight sell off had the screen looking very red Thursday morning in Class III futures. As the spot market approached contracts dipped much lower in front months, but after an eventful spot cheese market the front months recovered to settle unchanged to only slightly lower. May – Dec contracts settled 17 to 24 cents lower which has significantly flattened the Class III forward curve. Back half contracts are still trading at a premium to the front months, but we expect that curve to continue to flatten out over the next few weeks.

 

Class IV Futures

Contracts moved higher in Feb – Apr in Class IV Thursday as NFDM futures found a bit of support. The rise in NFDM futures came on light volume and should not change the market’s bearish sentiment. The decline in spot butter could lead the way for even more of a sell off in butter futures and Class IV, but the market was very stagnant Thursday.

 

CME Spot

One cheddar block traded after bids brought the market two cent higher. 27 cheddar barrels traded as the market slid as low as $1.4400/lb. A lone buyer chased the market up to $1.5100/lb before a hard close.  Three loads of butter traded between $1.8500/lb and $1.8900/lb.

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

 

To find monthly updates, visit: HG Dairy - Milk and Feed Market Update December 2014.

The report is written by Curtis Bosma, head of HighGround Dairy's producer division. You can contact him directly at 312-870-1185 or e-mail him at curtisb@highgroundtrading.com.