Nervous Markets And Wide Market Prices

Yesterday was an active day on the commodity market, with trades on butter and powders and more offers and more bids for cheese. We see a wide range of prices being reported back to us and we feel the market is nervously looking for direction. The bearish signals become a bit stronger and the fear/belief for lower prices might cause some sellers to sell lower. But at the same time, the bullish fundament keeps bringing buyers back to the market. If you ask us, the market can trade either way, where sentiment might bring prices down a bit over the next week, but fundamentals will push them back up later in the year.

Looking at the liquid market, we see the nervousness and uncertainty start at the source. The unusually cold June month with loads of rain is killing demand for fresh products. One of our partners even indicated to expect 50% less spot demand compared to last year. It seems either an ice cream in the pouring rain at 10 degrees isn't as popular as eating one on a bench in the sun at 25 degrees. But at the same time we have partners indicating increased demand for next week as the European Football Cup starts and food service is expecting a boost in sales. We therefore saw big differences in the prices reported back to us by our partners. For cream we heard prices as low as € 7700 FCA NL but up to € 8150 DAP Italy. SMC prices are reported between € 1850 and € 2100 fca. But to have a full view on the liquids markets, we expect tomorrow to give more clarity. It seems most buyers and sellers have been waiting for the other side to move.

Butter: Finding Buyers at Lower Levels

The butter market keeps trending lower, but it also keeps finding buyers. One of our partners phrased it nicely: "Butter has buyers queueing for lower levels". We heard prices for butter in Q3 trading as low as € 6500, but we found ourselves bidding more at these levels without finding sellers. We did trade a small volume at the end of the day at € 6580 for NL/DE/BE butter.

For Irish butter, we hear trades as low as € 6500 FCA NL but also hear we found ourselves offering at best at € 6650 FCA NL. The wide expectations between buyers and sellers might be underlining our expectations that prices could trade up and down over the next weeks. But the market is undeniably weaker than it was when the market met in Bordeaux during the Eucolait.

As both our buyers and sellers are very unsure about the market expectations we ended the day without many bids and offers. But we would expect to be able to trade on the following

• an offer for 4-6 loads NL/DE/BE fresh/frozen for July at € 6550
• an offer for 8 loads Irish for June-September at € 6650
• an offer for 6 loads NL/DE/BE fresh/frozen for Q3 at € 6600

We expect to have buyers for

• a bid for 6 loads NL/DE/BE fresh/frozen for Q3 at € 6525
• a bid for 6 loads Irish for August / September at € 6500 FCA NL
• a bid for 6 loads of Polish lactic for Q3 at € 6400

Cheese: Wide Markets

For the cheese market we also see strange wide markets. For Mozzarella we see more demand for the next two weeks, but it seems that availability is very tight. This is pushing price offers well over € 4200 while offers for July remain at € 4100. So we see a discount for collections further out.

On Gouda, we see the opposite moves. With an offer for Gouda for prompt collection at € 3950 we see the market heavily discounted v.s. the offers we can present for Q3. Here it seems the stocks are sufficient. Speaking to producers they expect prices to increase during the summer as they expect avialinblty to shrink whilst keeping good sales. The buyers are very skeptical and seem to be holding of their purchases.

We start the day with the following:

• an offer for 1 truck of Ammerland Gouda for prompt at € 3950
• an offer for 4 trucks NL/DE Gouda for July/August at € 4140
• an offer for 4 loads of Mozzarella for July at € 4100
• an offer for 6 loads of Mozzarella for Q3 at € 4150

Powders: Pressure Pressure Pressure

The only word that come to mind in the powder market is pressure, and that is strange given the fact that stocks and production are reported as low. But the bearish trend can be seen in the export market as well. The GDT Pulse traded down 2.2% v.s. the last GDT and the CME is losing a bit of momentum as well. After a few weeks of low activity, we also saw some uptick in our activity, with over 1250mt of powders trading over our platform it seems we are reaching sales prices where buyers feel comfortable enough securing volume. Prices for SMP traded down towards € 2300. Funny enough we did manage to broker a deal for BMP at € 2400,- a higher price for a product that usually trades with a discount.

We expect to have a market as follows

• an offer for 300mt Limelco smp for August at € 2375
• an offer for 200mt French smp for August at € 2400
• an offer for 300mt Polish SWP for June/July at € 810
• an offer for 300mt UK smp for August June/July at € 2400