Doubt and Uncertainty

The market remains nervous and is still flooded with doubt and uncertainty. We keep today's update short as it is more of the same as what we reported in the last few days. We see all our partners (traders, producers and end users) struggle with the market dynamics and the highly volatile prices for SMC, Cream and raw milk. Following these prices changes can make you have a different market view every hour it seems. 

A very quick overview of the market we saw today follows below.

Liquids: Up and Down

Looking at the market for liquids it seems that around 36-37ct a lot of people are looking to buy raw milk. Those with the capacity to separate the milk into cream and smc saw the prices for these products trade higher. But during the day we saw cream prices trade slightly lower towards € 6600 and SMC prices at the end traded also down towards € 1600-1700 after trading well above € 1800 delivered earlier in the day. We could say the market for liquids softened somewhat.

Butter: Wide Range

The higher cream prices yesterday created the expectation for sellers to be getting higher prices for their butter, and they should. Producing butter now costs over € 5800 and some even claim € 6000 production cost. But those who are on the buy side point to the slightly decreasing prices for cream that should produce cheaper butter. Our view on Butter's stance is bullish. We hardly see any butter from Ireland and Poland and even the NL/DE/BE butter is not that easy to find. This at the peak of the butter production is something we worry about and could have a massive impact for the second part of this year. With the biggest forecasted butter deficit in June this year compared to the previous ten years, the EU needs to produce a lot of butter to make up for that deficit. Producers will only do so if prices will rise a lot higher than today's prices.

We have buyers for

• 6 trucks NL/DE/BE fresh May / June at € 5800
• 6 trucks NL/DE/BE fresh Q3 at € 5950
• 12 trucks NL/DE/BE fresh/frozen Q4 at € 6100

We have sellers

• 6 trucks NL/DE/BE fresh/frozen Q2 at € 5950
• 4 trucks NL/DE/BE fresh/frozen April at € 5900
• 6 trucks Irish butter FCA NL for April / May at € 5850
• 6 trucks NL/DE/BE fresh/frozen Q2 € 6150

Cheese: Sideways

We will only dedicate a short segment here. Prices are stable, sellers keep to their offers of € 3800 for Gouda/Edam, € 23550 for Mozzarella and € 4000+ for cheddar. Only cheddar in the UK seems to be getting a slight discount just below € 4000. We invite buyers to give us bids for UK cheddar.

We start the day with

• a buyer for 1 truck German Mozzarella for April at € 3480
• a buyer for 6 trucks of Gouda for May / June at € 3730
• a buyer for 6 trucks of Gouda for Q3 at € 3800

Powder pushes higher

The powder side of the market seems to have found a bit of a higher trend. With more buyers and fewer sellers we slowly see higher prices being paid. On export, we are seeing prices roughly € 2300-€2330 on a FCA basis and for Q3 we graded some fresh German material at € 2450. Futures are also slowly rising. The main cause seems to be the higher SMC prices. Speaking to our partners the only question remains if they can hold. If we see prices for SMC trade sideways for the next three-four weeks we might have seen the bottom early this year. WMP/FCMP prices are on the rise as well, and earlier than most of our partners had expected. We still have sellers for

• 100mt of Solarec SMP codex for April at € 2450
• 200mt of Irish SMP codex for April at € 2330 FCA Ireland

Looking back at previous years, April is never a month of heavy volumes. With uncertainty about the weather, the milk production and how the Irish milk collection will develop, we expect the market to continue to trade sideways for most products with high volatility on butter and SMC and Cream.