Early Cucumber Season

Last week was a short brokering week from our side — only three active days — yet we still booked roughly 1,500 MT of product, split evenly between powders and butter. On paper that feels reasonably active, but the days themselves are getting longer, the conversations with our partners more repetitive, and the excitement noticeably thinner. The market has drifted into calmer waters across all three commodities: powders trading steadily at higher levels, butter ticking along near recent lows, and cheese activity feeling distinctly subdued.

The traditionally quiet months in dairy are July and August, but what we in the Netherlands call komkommertijd — cucumber time — appears to have arrived early this year. The market has gone numb from the macro newsflow. Whether war rages on in Iran, oil breaks $110 a barrel, the dollar strengthens against the euro, or European milk production prints another record month-on-month, dairy seems entirely indifferent.

From a macro perspective there is a credible case for a price spike. Commodities historically respond bullishly to higher energy prices: if input costs rise, sales prices tend to follow. But the textbook sequence requires production to slow down first, and so far the producing side is showing no such signs. France is dipping marginally below last year's record numbers, but the rest of Europe continues to break them. And the top 5 world producers are all showing more milk; nowhere do we see significantly less. Until that picture changes, the bullish macro narrative remains theoretical rather than tradable.

Logics In Riskmanagement

For buyers, the current quiet offers a window worth using rather than waiting out. Butter near recent lows with a credible macro upside skew is the kind of setup that rewards layered coverage — adding tranches into H1 and H2 2027 at current levels rather than chasing a move later. For sellers, the inverse logic applies to powders: levels are holding firm and the curve is offering decent forward value, so locking in is a defensible choice while production stays strong.

The trade most worth watching, in our view, is the moment European production cracks. Until it does, the market can stay numb for longer than feels comfortable and fun — but when it turns, it tends to turn quickly.

Butter: Fingers Hovering Over Both Buttons

Q4 is where the tension sits most visibly. Buying interest from traders is parked just below €4,300, while sellers are aiming just above. Neither side is willing to blink first, and the result is a curve that could move meaningfully in either direction depending on who moves their finger off the button first. If buyers pay up on the forward months, the entire curve lifts. If the sell side pushes more product into May-June-July, the entire curve drops. In conversations with our partners this week, we heard the same description from both sides: fingers hovering, waiting for the other to flinch.

Sellers have a few reasons to start feeling nervous. German retail butter sales were down roughly 12% in April year-on-year — a number that is hard to dress up as anything other than weak demand at the consumer end. At the same time, industrial buyers in France and Germany continue to add postponements for June, July and August, pushing collections into Q4. That dynamic is not benign: it tells you the front end of the curve is structurally oversupplied, and the back end is being asked to absorb volume it did not originally plan for.

Storage is the silent pressure point. Warehouses across Northwest Europe are filling up, and storage costs are rising in step. Cold storage capacity is not infinite, and once operators start pricing tightness into their rates, holding product becomes a meaningfully more expensive proposition. That is the kind of cost producers cannot pass on indefinitely. From our partners we are hearing fresh German butter trading around €3,800 for May-June, with Irish product offered just below those levels. Read together — soft retail, postponements, storage cost creep, and physical levels printing under €3,900 — the signal is reasonably clear: the market wants to take a step lower.

And yet. If tomorrow's GDT prints more bullish than futures are forecasting, the picture flips quickly. A surprise to the upside would likely flush out a new tranche of nervous buyers rushing the curve and bidding up H1 and H2 2027. In a market this thin, conviction is scarce and price moves are disproportionate to flow. Big moves in both directions remain entirely on the table — possibly within the same week.

Our read

The weight of evidence — German retail, postponements, rising storage costs, fresh physical below €3,900 — tilts the near curve lower. But the back end is a different conversation. Thin liquidity means a single bullish GDT print, an unexpected production stumble, or a single large buyer reaching for coverage can move H1 2027 by €200-€350 in a session. Sellers comfortable at current levels on the back end may want to consider whether they are being paid enough for the optionality they are giving away. Buyers waiting for €3,800 on the front may get it — but should have a plan ready for the day they wake up to a different curve entirely.

Cheese: A Perfect Standstill

We will admit upfront that we are personally enthusiastic about cheese. A good aged red cheddar, a fruity emmental, a soft mozzarella with tomato or strawberries — the product itself remains a genuine pleasure. The enthusiasm tends to evaporate, however, the moment we pick up the phone to our cheese trading partners.

The conversations have become almost scripted. "No real demand," we hear from the trading side. "No pressure at producers," comes the counter from the sell side. "Retail demand is still okay," producers add. "Production is up more than demand is," the demand side fires back. Round and round it goes, with each side holding a piece of the truth and neither willing to move toward the other.

Disagreement between supply and demand on price is not new — it is the friction that moves markets in both directions. What makes the current cheese market unusual is the complete absence of urgency on either side. Nobody needs to sell today and nobody needs to buy today, which makes it an almost impossible market to broker, and, as most traders will admit privately, an even harder one to trade.

The price picture is largely self-explanatory. We are showing offers for Irish Gouda at €3,450 that nobody needs, and bids for Dutch Gouda at €3,575 that nobody has. We are working offers for mozzarella at €3,550 that we cannot place, while simultaneously fielding bids for mozzarella at €3,400 that feel almost absurd when we forward them on. Cheddar indications sit roughly €300 wide between bid and ask, with neither side showing any visible willingness to improve. In every category, the spread is wide, the volume is thin, and nobody is flinching.

Our read

Our best analysis is that the cheese market has, for the moment, found something close to a perfect balance. Supply is comfortable, demand is steady-but-uninspired, and inventories are neither building dangerously nor drawing down meaningfully. That is not a particularly exciting headline, but it is a useful one if you build your strategy around it.

The practical implication is straightforward: as long as you avoid being caught on the buying or selling side at the last minute, the cheese curve offers a boring but genuinely steady purchase or sales programme. Layer your coverage, take a tranche every couple of weeks at the levels the market is offering, and resist the temptation to wait for a move that may not come. The risk in this kind of market is not being wrong on direction — it is being forced into the spread when liquidity disappears entirely. And in a market this quiet, liquidity can dry up faster than the bid-ask suggests.

Boring markets reward discipline. Exciting ones reward conviction. Right now, cheese is firmly in the first category — and that is not necessarily a bad place to do business, unless you are a broker...

Powders: Selective, but Steady

As said, despite the short trading week we still moved over 700 MT of powders last week and 250mt yesterday.  It tells us most of what you need to know about the current market: activity is selective, but firm where the product fits the demand. The phone keeps ringing, but only for the right material at the right level.

The defining feature of the SMP market right now is fragmentation. Spreads across origins, brands, specifications and packaging are unusually wide, with the full range — from BB up to liquid brand LH — currently sitting between roughly €2,750 and €3,120 ex works, all Codex SMP. That is a €370 spread for what is, on paper, the same product category. The key differentiator remains export suitability and brand acceptance. Exportable, in-demand material continues to clear comfortably at €3,000–€3,125 ex, while BB and non-exportable product remains difficult to place even when offered at meaningful discounts. The market is paying for credentials, not for protein.

On the supply side, most producers are sold ahead and under limited pressure. The product we see in the market sits primarily with the trade. At the front of the curve there is some pressure, but again it is selective: liquid brands move, less liquid material accumulates. That accumulation is worth watching — quiet inventory build at the trade level rarely stays quiet forever.

Looking forward, our read remains constructive for June and July. The EU–US spread is wide, and even with a potential correction in the US, Europe is expected to retain its export competitiveness. Oceania is out of season. Demand continues to come through. Most of our partners expect Algeria (ONIL) to re-enter the market shortly, and within Europe the larger food buyers appear well-covered, but the smaller food and feed buyers still have volumes to cover — which should support nearby demand. Most export enquiries remain focused on May, June and July, with limited interest further out. That reinforces tightness at the front and, in our view, meaningfully limits downside risk in the near term.

Offers — Codex MH + LH

• 200 MT, June, A-ware/Limelco SMP MH, fresh, 25kg, incl. std docs, excl. labels, €2,875 FCA BE
• 200 MT, June, Marijampolės SMP MH, fresh, 25kg, incl. std docs + labels, €2,850 FCA LT
• 200 MT, June, Rücker SMP LH, fresh, 25kg, incl. std docs + labels, €2,925 FCA DE
• 200 MT, May–June, W-EU SMP MH, fresh, BB, €2,875 FCA FR/DE/IE
• 150 MT, June, Isigny SMP MH, fresh, incl. std docs + labels, €2,950 FCA NL
• 100 MT, June, DMK Zeven SMP MH, fresh, incl. std docs + labels, €2,985 FCA DE
• 100 MT, June, Gransee SMP MH, fresh, incl. std docs + labels, €2,985 FCA DE

Offers — Unstandardised SMP

• 230 MT, May–June, High Protein SMP MH, min. 35.5% as is, fresh, Polish, 25kg/BB
• 50 MT, May–early June, N-IE SMP MH, min. 37.5% as is, fresh, 25kg, €2,975 FCA NL

Bids

• 200 MT, July, Solarec SMP MH, fresh, 25kg, €3,000 FCA
• 100 MT, June–July, DMK Zeven / Euroserum Guingamp / Milchtrocknungswerke / Walhorn, fresh, 25kg, USD 3,300 CIF Jakarta/Surabaya

Our read

Powders look very different from butter and cheese, and that is worth pausing on. Butter is sitting nervously near recent lows with a soft retail backdrop; cheese is stuck in a balanced standoff; powders are quietly firm with structural support at the front. For buyers with exposure across the basket, that contrast is useful — it argues for being more patient on butter, neutral on cheese, and reasonably proactive on nearby powders, particularly for liquid brand exportable material. For sellers sitting on less liquid or non-exportable product, the harder truth is that waiting for the discount to close is not a strategy. Liquid material is doing the work, and the longer non-liquid product sits, the wider that spread tends to grow.

A Final Note

Our favourite three commodities, still all with different stories, one common thread. Butter is waiting for someone to flinch. Cheese is waiting for someone to need something. Powders are quietly getting on with it, but only for the right material. None of these markets are loud right now, and that is precisely why they require attention rather than less of it.

The temptation in cucumber time is to pick up the phone less often, to assume the market will tell you when something is happening. It rarely works that way. Thin markets turn quickly, and the partners who stay visible, keep the information flowing, and keep showing where they are willing to buy and sell are the ones who get the call when the curve finally moves. Conviction in this market is being built one conversation at a time, not from a screen, a dashboard or a WhatsApp conversation.

So our call to action is genuinely simple: keep calling, keep the information flowing, and keep your visibility on the market high. The moment to be heard is not when something has already happened — it is the weeks leading up to it, when everyone else has gone quiet.

And the good thing about working with a physical broker? When there is genuinely nothing to talk about on the market, there is always something to laugh about that has nothing to do with dairy. That, too, is part of the job.

GFD, Good Trading 🤝