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


Class III Futures

The sell-off continued Tuesday, bringing February-December Class III contracts 14¢ to 36¢/cwt lower. April remained as the low point, settling at $14.27/cwt. Cheese futures were the main driver as Q1 contract average settled at $1.5280/lb (DOWN $0.0217/lb).  February cheese is now trading at about a 6¢ discount to spot cheese. Any sort of buying activity in the spot cheese market could provide some short-term support in these futures.


Class IV Futures

Tuesday brought another choppy move lower for Class IV futures. Both butter and NFDM futures sold off after a relatively uneventful spot session. Spot butter is at a 5¢/lb discount to the February contract.

Tuesday’s Global Dairy Trade (GDT) auction showed a glimpse of support for SMP & WMP. Our eyes are peeled to see if those markets have reached their bottom.


CME Spot

Another uneventful day in the spot market, as no bids or offers were posted for cheddar blocks and barrels. NFDM had some bids and offers come in, but no trades were made and the market settled unchanged. One load of butter traded at Monday’s settlement price and the market closed with another bid remaining there. 

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