Can Better Weather Firm up Prices?

Yesterday's market activity aligned with last week's trends. The sentiment in the butter sector is firming slightly, while the powder sector is weakening. Meanwhile, cheese prices lack a clear direction. Discussions yesterday primarily focused on milk intake and weather forecasts.

In terms of recent numbers, Germany continues to show growth compared to last year, with a 0.7% year-on-year increase in weekly comparisons. However, France has dipped below last year's figures again, with a 1.1% deficit. Analyzing these numbers and ongoing discussions, it seems that milk intake in the EU is likely to be, as it was last year, not as bad as some anticipated but not as positive as some presented. Production conditions seem favorable, but farmers' ambition is gradually weakening. The milk price, weather, and feed costs are favorable, but there are some headwinds.

Farmers requiring labor are experiencing significantly increased costs, if they can find the help they need at all. Political conditions are changing, and social pressure on farmers is increasing. Working 365 days a year, receiving considerable negative feedback from society, and not feeling supported by governments do not encourage farmers to invest in their future.

The weather forecast is brightening up, with warmer weather expected for the upcoming weekend and the week after. While it's not summer temperatures yet, the demand for fresh products seems to be gaining some support.

Butter: Looking for Sellers

In the butter market, sentiment appears to be firming. Although some believe cream prices will drop further, more buyers are showing interest in picking up butter, even for April. A trade for four loads of lactic Polish butter at €5700 suggests the market has found some solid support. Offers seem to be rising, even as buyers anticipate another round of pressure due to potentially lower cream prices. We therefore have a wide market at the moment where buyers and seller have wide expectations

Here is how we expect the market to start with the following bids:

• 6 loads of fresh/frozen butter for May-June in NL/DE/BE at €5775
• 6 loads of fresh/frozen butter for Q3 in NL/DE/BE at €5950
• 4 loads of Irish butter for June/July at €5775
• 4 loads of Arla DK butter for May/June at €5750
• 4 loads of lactic Polish butter for May/June at €5700

Cheese: Taking It Cheesy

Cheese prices are relatively stable with no significant changes from the previous day. Although more sellers are emerging, there's no notable pressure. Producers acknowledge that demand is slowing slightly, but many have secured solid sales for Q2 forwards and claim not to feel any pressure.

Today's opening bids include:

• 4 loads of Emmental for grating at €4500
• 4 loads of Mozzarella for May at €3525
• 6 loads of Gouda for May/June at €3835
• 6–9 loads of Gouda for Q3 at €3875
• 6 loads of Mozzarella for Q3 at €3750
• 6–9 loads of Cheddar curd for May/June at €4025

Powders: Lower Expectations

The powder market is challenging, with expectations falling faster than SMP prices. Last week, demand was sufficient, but now buyers expect to find sellers at even lower prices. The possibility of SMP prices dropping below €1000 this week has led some buyers to aim well below €2000 for spot deals. The best buying indications we have are:

• • 100 metric tons of Baltic SMP for May at €2125
  • 600 metric tons of Solarect SMP for Q4 at €2525
  • 200 metric tons of SMP with 36% protein at €2150 DAP NL