More Market Participants Waking Up

It seems the market rally that started this week continues, and the bullish sentiment is spreading fast to other markets. Cheese prices are shooting up as prices for liquid milk are leaving the low 40ct regions and nearing the 50ct mark. The butter market meanwhile keeps trading steadily firmer as the offers from producers dry up and the long positions at the trader's side shrink. After some boring months, the partners on all commodities seem to be waking up, causing a rally across almost all dairy commodities. 

The liquids market keeps tightening. Raw milk prices are reported lowest around 43ct but we even hear trades as high as 47-48ct for May. Cream prices didn't continue their rally although at € 7200 levels we have already seen a major jump up. SMC prices made another jump to an average of € 1900 although some traders claim to be selling € 2100. It is the fast-shrinking spot market for liquids that is converting to most. On top, we are getting some anecdotal feedback that the milk is getting thinner as fat content is dropping.

Butter: Traders Cashing Longs, But offers drying up

The butter market traded significantly up again today. With prices for June trading up to € 6300 for NL/DE/BE and Q3 trading toward € 6425 we see new high getting made. On Irish butter we saw a bit more offer during the day, it seems traders are trying to cash on their long position taken last week and early this week. But by the end of the day the offers started to dry up and bids started to increase again.

We see that more and more end users are calling to see where the market is, although most hang up after hearing the prices. With prices well below € 6000,- stuck in their heads, the offers at € 6300  up to € 6500 don't match their expectation. We do see that the more experienced buyers are accepting the new prices. They remember 2016, 2018 and 2022 and know that a butter market on fire can easily trade a few hundred euros higher within weeks.

As the market now is extremely volatile bids and offers are a bit hard to maintain. But we expect to start the day with:

• an offer for 5 loads Irish lactic butter for July  FCA Ireland at € 6300
• an offer for 5 loads Irish sweet cream butter for July FCA Ireland at € 6300
• an offer for 3 loads Irish lactic butter for Q3 FCA Netherlands at € 6400
• an offer for 3 loads of NL/DE/BE fresh/frozen for Q3 at € 6500
• an offer for 2 loads NL/DE/BE fresh/frozen for May/June at € 6325

Cheese: Bids Sharply Up, Hardly Any Offers

If butter goes, cheese needs to follow. Its a logic we have been told that almost always becomes a reality. It seems this year is no different. With butter prices up almost € 500,- in two weeks, cheese prices haven't moved much, but they are starting to. Although demand for May and June remains a bit unseen, we see bids for Q3 and Q4 get more and more active. Although it is still unconfirmed, we hear the first deals for Gouda for H2 are done above € 4000,- and demand at these levels is starting to show.

We expect to have a market as follows:

• a buyer for 6 trucks Mozzarella for May/ June at € 3600 DAP NL
• a buyer for Gouda for Q3 for 9 trucks at € 3950
• a buyer for Edam for Q3 for 9 trucks at € 3930
• a buyer for 9 trucks of Mozzarella for Q3 at € 3750 (German)
• a buyer for 12 trucks of cheddar curd for H2 at € 4100 DAP NL

We expect to have sellers for

• 9 loads of German mozzarella at € 4000,-

Powders: Sentiment Turning

On the powder side of the market, we don't see the bullish situation we see on liquids, butter and cheese, we do feel a slight sentiment change. But it could be best described as more convinced the market has reached its bottom, but the countdown clock for a bullish liftof hasn't started yet. Fundamentally the powder market is much less affected by EU milk supply than the cheese and fat market. But we did see more traders pulling their offer up, and more buyers coming to scrape up the low offers in the market. We don't see any low offers anymore in the market and have trouble signalling where they should come from. Cheap SMC is not validating low sales, stocks seem to have moved from suppliers and traders to end users and fresh production needs to be sold at € 2400+ to make sense.

We start without any concrete bids and offers on powders.