Butter on a Breakingpoint

Two days into this week, and volumes brokered on butter have already passed last week's total. The market is not waiting around. Post-Easter cream is doing exactly what it always does — arriving heavier, faster, and cheaper than sellers would like. Buyers for Q2 butter are thin on the ground, which leaves producers with a familiar and uncomfortable choice: put more butter away and hope demand returns Q3 onwards, or sell cream now and take the cash. Neither option is bullish. Sold cream, after all, mostly ends up as butter somewhere else. The circle of pressure is complete.

Cream prices for this week's collection are coming in between €3,500 and €3,600. Next week already feels slightly better at €3,800–€3,900 — but the direction is clear. Good milk flow, high fat content, weak spot demand. The seasonal script, running on time as usual. Poland is already responding: lactic butter offered at €3,750 FCA, sweet cream even at €3,700.

Irish producers are following, just more slowly. With Polish offers between €3,700 and €3,800, Irish sellers asking €3,900–€4,050 will find limited enthusiasm. The lag is typical. It resolves eventually, always in one direction.

Futures are adjusting too, though the gap to physical remains striking. Q3 futures still trading above €4,400 while our lowest physical Q3 trade sits at €4,080. A spread of over €300 between futures and spot doesn't close by physical moving up. Some are betting on it anyway — selling futures at that premium, waiting for convergence. For closeby, the gap is already narrowing. Whether that's comfort or warning depends on which side of the trade you're on.

GDT Pulse added more evidence to the bearish pile — butter prices down over 7% in the latest session. Prices remain well above EU levels, but the direction is the same everywhere. CME however added a few cents on the spot call, lifting sentiment modestly. Partners active in the US describe a market that feels far from bullish, but with limited downside left. The general view: not much room lower in the US, more potential higher over time. For now, a market that watches and waits.

Our broker market remains thin. Participants on both sides can be counted on one hand.

Cheese: Heavy and under Pressure

The weight of lower fat prices and softer powder markets is starting to show. Futures for further out positions are pulling physical sentiment with them. We searched for buyers. We mostly found sellers.

If pressed, €3,400 is probably the best number you'll hear for Gouda, Edam, or Mozzarella in Q2. Trades to report: none. Bids to show? None! and the current offers are plentyfull to find:

Powders (SMP): Waiting to Move (up) Again

A different story. Here, futures are pulling the market higher rather than lower. Buyers are returning, with bids at €2,600–€2,625 FCA. Offers have moved up to €2,700–€2,750 for Q2/Q3 depending on origin and period. EEX June traded around €2,850 yesterday, and producers aren't feeling any pressure to move. Most are still executing Q2 contracts. Q3 is starting to enter the conversation — initial selling indications around €2,750–€2,800 ex — but for many it remains too early to commit without a premium.

Export enquiries are picking up. Buyers, however, are not yet in a hurry. The market is holding its breath.

The broader dairy picture remains thin, volatile, and unsettled. But the general expectation is that prices move higher once export demand becomes more active. For powders, at least, the fundamentals are pointing in a different direction than butter. We have been working with the following markets:

Final note

Three markets. Three different moods.

Butter is repricing under the weight of seasonal supply, with physical leading futures lower and the gap between them still uncomfortably wide. Cheese is quiet in the way that feels more like avoidance than patience. Powders are the outlier — futures pulling sentiment up, producers in no rush, export demand slowly stirring.

What ties them together is uncertainty. Nobody is in a hurry to be wrong. Positions are light, conviction is lighter. In markets like this, the ones who move first tend to set the price — and right now, most are happy to let someone else go first.

We'll be watching. As always, we'll let you know what we see.

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GFD — Get Fair Dairy / Good trading. 🤝