Different Bouncing Balls

To follow up on Tuesday's update, we saw the butter bulls put up a fight yesterday. Driven by stronger-than-expected spot demand for butter and steady cream prices, sellers increased their prices, and nearby buyers followed suit. This stronger sentiment also lifted Q1 butter prices slightly, though we haven’t fully rebounded. Using sports analogies, the butter market feels like a basketball, bouncing up and down, but with each bounce, the ball rises a little lower than before. Meanwhile, cheese feels like a golf ball bouncing on the fairway. But after last week’s bounce, prices have returned to where they were, with little extra demand showing, suggesting that the ball is simply rolling forward down the green. And what about the powder market? It feels like a heavy bowling ball, steadily rolling along, unaffected by what it encounters on the track.

The market for liquids remains fairly steady. Yesterday, cream prices traded roughly between €9,600 and €9,900, and industry demand seems solid. Where demand had faded a bit last week, we’re now seeing it return slightly stronger. Even with a bit more cream available, the market feels robust. However, the same cannot be said for other liquids. Raw milk prices have dropped well below 60 cents, trending between 55 and 58 cents, while SMC prices continue to slide below €2,300, with some even quoting €2,225.

Butter: Demand for October

We woke up early yesterday due to a pinging phone. Demand for October for NL/DE/BE, Irish, and Danish butter has reappeared. Admittedly, we haven’t brokered much since buyers need prices around €7,200/7,300, while sellers have raised their prices well over €7,500 for nearby terms. We did manage to broker a small deal at €7,400 for Arla DK butter.

Q1 prices have also moved back up. After being offered as low as €6,650 yesterday, we saw buyers return at €6,800, only to find sellers back up at €6,900. Higher demand on futures spooked sellers and prompted buyers to chase Tuesday's offers again. How long this basketball market will bounce up and down, we don’t know, but the nearby tightness and longer-term bearish outlook will continue to keep this market volatile. We expect to start the market with

Current Butter Market Overview:

NL/DE/BE

Period	Bid	Size	Offer	Size
October	€7400	88	€7500	88
November	€7200	88	€7550	132
Q1	€6800	132	€6900	66
Q2	€6300	132	€7000	66

Irish Butter

Period	Bid	Size	Offer	Size
October	€7200	44	€7550	88
November	€7200	132	€7400	Indicative

Polish Butter

Period	Bid	Size	Offer	Size
October	€7300	44	€7750	88
Q1	€6400	132	€6900	132

Cheese: Looking for Buyers

Those cheese buyers are doing an excellent job of staying hidden. Even with attractive offers on the market, buyers seem to be holding off on their purchases. While availability might not be extensive, the demand simply isn’t there. We still feel it’s a case of buyers lying low, but we would have expected them to return to the market with Gouda offers as low as €4,650 and Mozzarella even as low as €4,400.

If the buyers are playing a waiting game, it’s a risky one. However, if they don’t return soon, we might see prices drop further over the coming weeks. We expect to have the following markets...

Cheese Market Overview:

Gouda

Period	Bid	Size	Offer	Size
October	€4300	44	€4650	44
Q4	€4200	132	€4650	132
Q1	€3850	132	€4450	132

Mozzarella

Period	Bid	Size	Offer	Size
October	€4100	44	€4400	44
Nov-Dec	€4150	132	€4400	88
Q1	€3800	132	€4200	88