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End of the Correction? Did you Buy the Dip?

4 min read
  • Butter
  • Cheese
  • Powder
  • Liquids
The market activity is picking up again, with buyers and sellers showing their cards. Yesterday's GDT has clearly awakened butter buyers, as we see increased demand returning to the market. It appears that the GDT is also setting the tone for the powder market. Despite more pressure in the front months, we see increased demand from September onwards, in line with yesterday's GDT results. The only market remaining quiet is the cheese market, but how long can this inactivity persist?

The liquid market continues to perform well. While we can't be overly bullish, the market has found a plateau and seems ready for another liftoff. Cream prices remain below €8000, although we hear that they are not trading far below this level. With improving weather forecasts, we are looking forward to enjoying ice cream outside with our kids next week, as temperatures are expected to reach 27 degrees in Holland. SMC prices remain steady, and there is strong demand for raw milk at just below 50ct DAP for July.

Butter: Leaving the Dip Behind

Butter seems to be leaving its dip behind as more buyers return to the market while suppliers are slowly pulling back. EEX futures have risen and are now trading roughly €125 above last week's prices. The physical markets reflect this trend, with prices well over €6600 for NL/DE/BE and Irish butter, leaving the lower prices of €6400-€6500 behind. Buyers for winter butter are even paying around €6800 again. We understand that there is significant resistance from buyers to accept another price increase after receiving lower offers in previous weeks. However, the past few weeks felt like a buying opportunity, and those who missed it might not be quick to follow.

We are not entirely convinced that the market will soar from here, understanding the resistance from buyers to purchase at higher prices. However, those willing to accept the current offers might be satisfied in a few weeks. We are confident that the market has found its floor and will only trade upwards from here.

We start the day with:

  • An offer for 2 trucks of Galli butter for June at €6575 DAP NL
  • An offer for 4 trucks of French butter for July at €6660 FCA NL
  • An offer for 4 trucks of Irish butter for July at €6675 FCA NL
  • An offer for 3 trucks of NL/DE/BE for Q3 at €6700
  • An offer for 3 trucks of NL/DE/BE for Q4 at €6775
  • An offer for 3 trucks of NL/DE/BE for July at €6675
  • An offer for 1 truck of German 10kg butter for July at €6650

We have buyers for:

  • 4 trucks of Irish butter for June at €6550
  • 6 trucks of NL/DE/BE fresh/frozen for Q3 at €6650
  • 6 trucks of NL/DE/BE fresh for Q4 at €6700
  • 6 trucks of Arla DK frozen butter for June at €6500
  • 8 trucks of NL/BE/FI winter butter for September/October at €6775
  • 6 trucks of Lumiko Lactic Frozen for August/September at €6500
  • 4 trucks of Mlekovita Sweet Cream for July at €6450

Cheese

What can we say about cheese that hasn't been said before? Our favorite cheese is Emmentaler or a nice old Gouda. However, we don't have much new information. We see offers for cheese grinding down, but demand remains absent. Our gut feeling is that demand might pick up in the coming weeks, and prices will improve. We observe that buyers are postponing purchases, but sellers don't seem to have much to offer.

We start with offers for:

  • 4 trucks of NL/DE Gouda for July/August at €4100
  • 4 trucks of Mozzarella for July/August at €4100

Powders: Eyes on Q4

Forget about Q3; let's look at Q4. That's the message from our partners. With most purchases for Q3 already made, attention is now on Q4. The GDT this week showed that buyers are keen to buy and ready to pay a better price for Q4. However, finding sellers for Q4 is as challenging as finding buyers for Q3. With this market mismatch, it's uncertain which direction the market will take.

Despite bearish signals, we are becoming more bullish on SMP. While there may not be many buyers left for Q3, Q4 demand could make up for it. Q4 buyers are setting a floor for the Q3 market. At some point, it makes more sense to store the product for Q4 rather than sell it immediately. With low powder stocks and a lot of postponed demand, the market could turn quickly. Rumors that ONIL will announce a new tender next week are already exciting some of our partners. This could trigger demand from buyers who have been postponing purchases, hoping to secure cheaper products during the summer.

We start with more offers:

  • An offer for 300mt of Belgian SMP for August at €2350
  • An offer for 150mt of Dutch SMP for June at €2300
  • An offer for 200mt of Belgian SMP for July at €2300
  • An offer for 200mt of French SMP for August at €2400
  • An offer for 200mt of Polish SWP for June/July at €795
  • An offer for 300mt of UK SMP for June/July at €2380

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