Breaking Buyers While Sellers Speed-Up

The first two trading days of this week have taken a bearish turn for the commodity markets. Despite ongoing discussions with producers who continue to wave bullish flags, prices for nearly all commodities appear to be sliding. The arguments from producers are familiar and surprisingly consistent across borders: supply isn’t overwhelming yet, and there’s widespread concern about droughts and bluetongue.

Still, with the season pushing towards its peak and cows now enjoying their time outdoors, most producers seem poised to ramp up sales. Buyers, on the other hand, who already stocked up in recent weeks, are now rethinking their forward strategy. With trade barriers looming and uncertainty clouding demand, they seem increasingly inclined to slam on the brakes. So here we are: sellers ready to gear up, and buyers hitting the brakes. The result? You don’t need to be a traffic analyst to sense a crash might be imminent. Buckle up… this could get messy.

One of our regular producer contacts, when presented with this analogy, chuckled and noted that it seems only traders are hitting the gas—offloading volumes at lower levels. And we have to admit: for now, it’s mainly traders active on the sales side, with some producers tentatively following. But as one trader aptly put it, “You want to be off the road before the pile-up starts.”

So who’s right? Will traders outmaneuver the crash, or will producers once again end up looking like the strategic geniuses, watching traders undercut each other into oblivion? Time, as always, will tell.

Alright, enough analogies. Let’s look at what’s actually happening in the market.

Liquids: Wobbly and Unsettled

The liquid market is, in a word, shaky. We've heard a wide range of prices over the past 24 hours. Some sellers still claim to be achieving €8,500 for cream, while buyers in Eastern Europe report trades closer to €8,200–€8,250. UK cream is falling even faster, with availability well below €8,000, and spot offers as low as €7,650 FCA.

We should note there's some anticipation of reduced activity next weekend due to Easter. As for raw milk and SMC—well, it's eerily quiet. Producers aren't quite ready to lower prices, but with demand this soft, they might not have a choice for long.

Butter: Sliding

The butter market is in a clear downtrend. Yes, we’ve said “bearish” before, and yes, buyers keep reminding us that any market with butter still above €7,000 can’t be that bearish. But let’s be honest: it's getting there.

Polish butter is being offered at €7,050—without much success. Most buyer bids start with a six, and we expect trades to land in that zone soon. In NL/DE/BE, prices have already slipped from €7,300 to around €7,100 for April–May.

Traders are reporting that end-user appetite for Q2 is pretty much satisfied. And with Q3 and Q4 futures in backwardation, those still interested are aiming below spot. Cue the usual refrain: if Q3/Q4 prices aren’t rising, Q2 spot prices need to drop to make room for cash-and-carry business. Expect this to unfold in the next 2–3 weeks.

Irish butter is already trading down to €7,050, and we're hearing whispers of even lower offers from some co-ops. Bids are now dipping below €7,000 FCA Ireland, while offers still cling to the last traded levels. Looking at Q3, we still see sellers holding the €7,100 line, but bids are inching lower—below €7,000 for Irish, and hovering around €7,000 for NL/DE/BE.

We expect to start the day with offer for

• 88mt NL/DE/BE fresh/frozen April–June @ €7,150
• 88mt Irish fresh/frozen May–July @ €7,100 FCA Ireland
• 42mt Polish for April @ €7,050
• 22mt Swedish for April @ €7,200
• 22mt Frozen Arla Winterbutter @ €7,275

Yes, there are still buyers—but bids are dropping quickly. Latest indications:

• 88mt NL/DE/BE April–May @ €7,100
• 88mt Irish May–June FCA NL @ €7,000
• 88mt Polish sweet cream next week FCA PL @ €7,000

Cheese: Buyer Fatigue Setting In

Bids on cheese are no longer as easy to find. Weaker cream prices are making buyers cautious, while sellers are noticing inventories stacking up.

Mozzarella is offered around €4,250, with buyers aiming just below €4,200. Gouda is still quoted near €4,400 from producers, but buyers are now looking well below €4,300. Cheddar feels weaker, too, with increased availability from the UK and Ireland.

End users supplying German retail say that at current levels, they’re not closing any deals. With inflation still biting, retailers are in no rush to raise shelf prices again, and negotiations are becoming... let’s say, prolonged.

We expect sellers for:

• 6 trucks NL/DE/BE/DK mozzarella May–June @ €4,225
• 6 trucks NL/DE Gouda May–June @ €4,375

Powders: Weak, But Not Collapsing (Yet)

The SMP market continues to soften. Prices for nearby delivery aren’t falling off a cliff just yet, but the outlook for later periods is clearly weakening. Most buyers now claim to have producer offers around €2,400 FCA France/Germany for Q3. Bids for the coming months are closer to €2,350—not that many sellers are biting just yet.

Still, with SMC under pressure and exports not exactly booming, we’d say buyers will eventually get what they want.

Across the pond, NFDM on the CME is heading toward its lowest point of the year. Many expect U.S. product to flood into what are normally strong EU markets. Only China might divert, but NZ and Australia are ready to fill the gap.

All in all, we’re not expecting fireworks on powders. Keep an eye on Poland and Ireland—producers there don’t seem to have forward sold much yet, and they may soon face a rather indifferent market.