Pre GDT Start

Yesterday was a very inactive day from our side. We started where we ended the week with a wide spread between buyers and sellers. That gap seemed to widen during the day as we saw sellers stepping out after buyers came back to the market with even lower bids. Most of the producers are in no hurry to sell anything, and apart from some cheaper products out of Poland and Ukraine, the market continues to feel tight. Most partners seem to be looking for some guidance and hope that the GDT results will shed some light on what the market has to bring.

Looking forward to the GDT we expect a bit of bullish momentum on the SMP markets. We have been seeing increased demand for further out in the recent weeks and with lowered volumes and increased uncertainty, we would expect buyers to lock in some quantities at higher prices. Looking at the NZX/SGX futures we see the expectations are in line with ours. WMP prices we expect to trade sideways to slightly higher.

Looking at the fats we would expect AMF and Butter to trade up as well. Futures might indicate a weaker result, but it seems the fat market has found some upward momentum. We expect EU butter to trade flat v.s. the last GDT as the internal EU market did drop over the last days, but is back to roughly the same level as two weeks ago. AMF is always a surprise to us, but after asking our partners it seems demand has come back a bit. Overall we would expect to see a positive outcome for the GDT Headline between 1 and 3%.

As said the EU market got off to a very slow start this week. The first signals from the cream market look steady to slightly firmer. German buyers already expressed interest yesterday at prices of € 6700-€6800 DAP. We would expect the cream market to trade steady to slightly up. SMC prices do seem under pressure with the expectation for Greece to remain absent from the market for the next week.

Butter: Sideways

Looking at the butter market we saw buyers aim lower, and sellers aim higher making a deal impossible to broker. With some cheaper Eastern EU products appearing on the market, the prices for April are under pressure, while futures for Q3 and Q4 traded lower in the morning, but higher at the end of the day. Looking at the market from an Irish perspective, things continue to look grim. We still hear some producers who are facing -10% milk intake still and the grasslands continue to be wet. Over 1,5 months of production now is lost, and it will be hard to recover from those deficits. We expect to start with:

• a buyer for Q3 at € 5900 for NL/DE/BE lactic
• a buyer for Q4 at € 6000 for NL/DE/BE lactic

Cheese: Higher offers

It seems the cheese market is expecting to trade higher. We see all our sellers moving up with their offers as EEX futures firm up a bit. Buyers are not in a hurry to follow so our market got wider. We expect to start with:

• a seller for july/august Gouda at € 3875
• a seller for may/june Gouda at € 3850
• a seller for may mozzarella at € 3600

Powders: More demand

On powders, we see a clear shift to more demand, the only thing missing now is offers for Q3 and Q4. For April and May we continue to see offers and buyers seem not to be in need of anything urgent. But the willingness to lock in products for Q3 and Q4 grows. Lower SMC prices might put the market a bit more under pressure, but a firmer GDT might pull the market up. We expect to have bids for:

• 300mt of Solarec smp for June/July at € 2350
• 100mt of EU15 codex for April (can be aged) € 2150
• 750mt of Solarec smp for Q4 at € 2625
• 150mt of EU15 smp big bags fca NL/DE/BE/FR at € 2390
• 450mt of Barry Callebaut spec BigBags for Q3 at € 2420
• 450mt of Barry Callebaut spec BigBags for Q4 at € 2500