The Class III futures market took a different turn from today’s cash session. Across the board, Class III traded lower with the vast majority of the day’s volume focused in the September and October 2025 contracts. Given the decline, the entire Class III futures curve is forecasting lower CME blocks from the current price point. The spot butter market remains under pressure. If we finish Friday at or below today’s settlement, this will be the first time we’ve ended a week below $2.30 since late April of this year. Butter futures are holding about a 20¢-per-pound premium to spots, effectively forecasting a rally in the spot price as early as October. All eyes will be on tomorrow’s Milk Production report, which follows last month’s higher-than-expected 3.3% year-over-year increase.
Today’s Highlights:
Class III contracts slipped lower on the day, with Q4 futures settling at $18.02 per hundredweight, a 16¢ loss. Class IV also dropped, down 17¢ to $18.33 per hundredweight.
Global milk powder prices remain in a tight cluster, with the weekly CME NDM average at $1.26 per pound, New Zealand at $1.25 and Europe at $1.26. The CME cheese average of $1.84 per pound is still far below New Zealand’s $2.06 and Europe’s $2.31. The butter price gap also remains wide, with the CME price at $2.31 per pound, New Zealand at $3.16 and Europe at $3.65.
