Activity to Boost Dairy Prices

Yesterday, the market appeared to come back to life. With over 1200 metric tons traded on the GFD platform, the recent days' lack of activity was quickly forgotten. The market's activity was primarily sideways, with butter prices showing slightly more bullish momentum. What has boosted the market activity? It seems no one wants to be compared to an Ajax player...  We now see our counterparts aiming to be on the winning side of the market once again.

The reason behind this sudden surge? It's hard to pinpoint, as there's little in the way of news. So, let's delve into the commodities to see what's happening.

Liquids: More Supply, More Demand

Most EU countries are reporting a surplus in milk collections compared to last March, except for the Netherlands and Ireland. Germany, France, Belgium, Poland, and Italy, in particular, are experiencing growth in milk volumes. Additionally, the milk seems to be "thicker", with higher fat and protein content, leading to a stronger growth in milk solid collections.

Interestingly, the increase in milk supply isn't leading to more market pressure. There's strong demand for cream, and Skimmed Milk Concentrate (SMC) prices are holding steady. Cream prices are soaring, with reports of prices as high as € 7050 DAP Germany, and there are expectations of further increases. SMC is trading between € 1600 and € 1700 fca basis, maintaining a low base price for Skim Milk Powder (SMP) production. Raw milk prices during Easter dipped, but are now trading steadily between 36 and 38 cents.

Butter: Rising Cream Prices Lead to Higher Butter Prices

Following the trend we predicted, increased demand for cream has led to rising butter prices. The first signals of heightened cream demand were followed by a rise in EEX futures and immediate responses from butter traders. with over 300mt of butter trading, it was an active day. Irish butter is trading between € 5875 and € 5920, while NL/DE/BE butter prices for Q2 are around € 5970, and for Q3, they are around € 6175. End users and traders are resisting the higher prices, but waiting for a post-Easter dip seems unfruitful. As the saying goes, if everyone expects something to happen, it probably won't.

We start the day with:

• a bid for 2 trucks NL/DE/BE fresh/frozen at € 6000 June
• a bid for 3 trucks NL/DE/BE fresh/frozen at € 5980 Q2
• a bid for 6 trucks NL/DE/BE fresh/frozen at € 6100 Q3
• a bid for 6 trucks NL./DE/BE fresh/frozen at € 6150 Q4

We have sellers for

• a seller for 4 trucks NL/DE/BE fresh/frozen May-June € 6050
• a seller for 6 trucks NL/DE/BE fresh/frozen Q3 at € 6175
• a seller for 4 trucks Irish June at € 5975

Cheese: Its Alive!

From being one of the least active markets for weeks to being the most active yesterday. With over 500mt of Gouda trading for May-August we see the Gouda market is back! We had partners question if we think the market is trading up or down, we would say it's trading along its long-term trend sideways. But with prices between € 3825 and € 3850 you could argue prices are higher than the last trades for April just below € 3800,-. But looking at the highest price only 5ct above the "market level" for four months ahead, some argue that it's a bearish signal. We would still be more bullish on cheese.

We expect to start the day with:

• a seller for 6 loads NL/DE Gouda 48% slicing July-August at € 3850
• a seller for 6 load NL/DE Gouda 48 slicign for June at € 3840
• a seller for 4 loads Mozzarella for April/May at € 3600

We expect to have buyers for

• a buyer for 6 loads Gouda July - August at € 3825
• a buyer for 1 load of Mozzarella April at € 3500
• a buyer for 4 loads Gouda September at € 3875

Powders: Export Activity

Activity in the powder market among our EU partners is slow. Buyers seem content with their current stocks, waiting for market pressures to mount. A price floor for powders seems to be established at around € 2200 for codex and € 2250 for non-standardized material.

Sellers, having moved some quantities in recent weeks, are also in no rush. We're witnessing a slight uptick in export activities, particularly towards North Africa, with over 350 metric tons brokered yesterday.

Expected selling interest includes:

• 200mt of Solarec SMP codex for April at € 2350
• 200mt of Irish SMP codex at € 2300 FCA Ireland
• 50mt of Eastern EU BMP at € 2125 FCA Poland
• 150mt of Polish Non-Standardized at € 2350 FCA Poland

Overall the increased activity indicates the postponing of decisions does not lead to no activity at all. The market needs time to find the right price, but in the end, it will and where it needs to land. We would expect activity to increase as the week progresses.