An Update in Calm Conditions

Those noticing that our update frequency has dropped recently are absolutely right. Over the past years, we've had no shortage of material — from COVID to trade wars, from bluetongue to FMD and droughts. Even in quieter times, one of the major commodities we broker typically showed enough movement to warrant analysis. Now? Not so much. The truth is simple: lower volatility means fewer meaningful updates. So here is a quick overview. 

🥛 Milk Flows: Familiar Patterns

So far this week, the trends are holding. French milk supply continues to outperform both 2023 and 2024 on a weekly basis and German milk is recovering a lot slowwer. Spot liquid markets remain sideways, with cream trading around €7,900 in Western Europe and slightly lower in Eastern regions. Raw milk is widely available, with German spot milk trading just above 40ct, French milk slightly below, and SMC still hovering between €1,500 and €1,600. Bulls will point to increased demand from the fresh sector, and with the peak in France behind us they will point to increased chances of higher spot prices. Bears will tell you that even with good weather conditions, spot demand hasn't picked up as much as most would have expected, keeping prices stable.

📉 Quotations: Not Much to See

Quotations confirm the sideways slump. Butter quotations dipped toward €7,260 on average, propped up slightly by the French indicator (or lack thereof) at €7,430. SMP edged up €6/mt, while whey slipped €8/mt. Cheese quotes felt heavy but changes were minor — only Cheddar curd showed a notable correction, down €85/mt. As noted before, most movements feel highly localized or triggered by one-off buyer/seller decisions.

🧈 Futures Flare-Up: A Case Study in Market Optics

Today's butter market provided a textbook example of how hour-to-hour volatility is something else as daily or even weekly volatility. With physical prices for NL/DE/BE trading around €7,100–€7,220, for June + Q3, most of our partners (and ourselves) were caught off guard as H2 (Jul–Dec) futures traded up to €7,375. Cue mild panic, although we did not see many buyers react. Offers were pulled. Tension rose. The market momentarily felt tight (on offers)

But by the end of the day, reality had reasserted itself and most partners came to the same conclusion:
🧾 Cream prices hadn’t budged.
🛒 Retail demand was still soft.
🏭 Producer offers were plenty around
📉 Futures eased back to €7,275, and Q3 offers fell even lower.

From where we stood, the start and the and of the day showed a lot of similarities. Offers were back where they started, and buyers are content to bid at familiar levels. So was this a signal of volatility? Or the result of a single buyer triggering overreaction with a relative small purchase in a market that's producing over 5,500 mt/day?

If today's move taught our partners (on both sides) means anything, it is not to overreact and act on sentiment in a market that doesn't show any fundamental changes.

🧀 Cheese: No Sell-Off, Just Gravity

Cheese continues its slow decline — not dramatic, but directional. Prices have been scraping of a few cents every week, and price changes are easy to miss. Only when zooming out is there a clearer trendline. Two weeks ago we saw a drop in mozzarella prices to €4,000 due to a temporary oversupply, but prices on that low side didn’t last. Prices rebounded and rejoined the longer-term trend. It still feels prices are heavy, but not heavy enough to break the trendline down.

Cheddar continues to tick down week by week, quietly signaling more than the occasional headline-worthy dip. It seems in March the Irish had a lot more milk to process (about 9% on MS basis) but. decided not to put that towards butter. With a 6.5% decline in butter production v.s. the previous year it seems most of the fat went to cheese production, explaining the heavier cheese market we see today ( mainly on cheddar).

🌫️ Powder: A Fizzled Flicker

Even we felt a flicker of excitement in the powder market last week. Prices ticked up, boosted at the beginning of the week by the US-China trade deal (or potential of one...) . Futures stirred. But four days later, offers flooded back in, and bullish sentiment fizzled out. A weaker-than-expected GDT Pulse and ample SMC supply quickly cooled the mood. If you’d stepped away for a week — or even a month — you wouldn’t have missed much. We continue to see a bit more product from Ireland and the UK, but the demand focuses on French and German products.

🧭 Perspective: What’s Worth Reporting?

Dairy markets are never easy to forecast. Weather, animal health, supply chains, consumer trends, global politics — it’s all in the mix. But ironically, all that external chaos seems to be stabilizing prices. Low stock levels are keeping buyers and sellers locked in hand-to-hand combat, which leaves little room for fireworks.

We’ll be back when it matters. In the meantime, expect to receive fewer emails.