Flat Fats & Pressure on Powders

Examining the market's performance yesterday, it appears that commodities rich in fat halted their downward trajectory and found some support. However, protein prices continued to decline due to the influence of low SMC prices. The sustainability of current prices is still a subject of debate, as mentioned in yesterday's report. Given the limited addition of new information to yesterday's analysis, our update for today will be short.

In the market for liquids, there is some notable support. Reports from our partners indicate that raw milk is holding steady compared to last week, with demand showing better than expected levels. Cream prices experienced a slight morning increase to yesterday's reported levels, reaching in the morning €6700-6800, only to dip later in the day and settle around €6750. Support appears robust, leading us to anticipate a sideways to slightly higher trend for the cream market. However, SMC prices saw a significant decline, ranging from €1400 FCA France to €1700 FCA Germany. Despite this, the overall liquid market seems relatively balanced, except for SMC.

The butter market is displaying a sideways trend, with Q2 prices trading between €5580 and €5600. Q3 prices are reported at €5670 to €5750. Polish butter faces some pressure, with spot trades at €5420, though lower prices are rejected by sellers. Specific demands from buyers are observed, with prices reaching up to €5700-5750. The butter market felt stable yesterday, and we anticipate this stability to persist, provided cream doesn't experience a significant correction. Offer expectations for the day include:

• 6 loads of NL/DE/BE fresh/frozen in Q2 at €5620
• 6 loads of Irish butter fresh/frozen in Q2 at €5700 FCA NL
• 4 loads of Polish butter frozen for March at €5450 FCA PL

Buyer expectations for the day include:

• 6 loads of NL/DE/BE fresh/frozen in Q2 at €5500
• 6 loads of Irish butter fresh/frozen in Q2 at €5400 FCA NL
• 4 loads of Polish butter frozen for March at €5350 FCA PL

The cheese market appears stable, although buyers claim to be receiving cheaper offers than what is seen in the market. With limited new trades, we expect the market to remain at yesterday's levels, featuring sellers for various cheeses in March.

• a seller for 4 loads of Gouda for March at € 3850
• a seller for 6 loads of Gouda for Q2 at € 3880
• a seller for 3 loads of German Mozzarella for March at € 3650
• a seller for 4 loads of Cheddar Curd for March at € 4100
• a seller for 2 loads of Edam for March at € 3900

In the powder market, there is activity from our side for export demand. Calculated back to cost prices, trades are observed around €2350 FCA NL. Interest from buyers diminishes slightly at these levels, while offered prices become more accessible. Anticipating a step back in the market in the second part of the week, we note a bearish trend globally. SMC prices are expected to decline further in the coming weeks, affecting the cost price of additional SMP.

Expectations for the day include buyers for:

• SMP Medium Heat, German origin (ruecker preference) at €2350 FCA DE
• SMP Non-standardized, EU origin, 200-400mt at €2200 FCA NL

We also have an offer for:

• 130mt of Non-standardized SMP, 38% protein, NL Origin at €2500 FCA NL.