Flat GDT with bearish undertone

After a typical pre-GDT Monday, yesterday was a typical GDT Tuesday with no action before lunch and all the action after. And with the GDT result flat compared to last time we expect that tomorrow all participants will spin the result to fit their market view. We think the decline in volume has saved this GDT from falling further down. If volumes would have been the same we think the GDT would have traded lower. For Europe, the results seem to be a bit more bearish, and we do not think the firmer butter price can have any impact on the EU market price. 

Looking closer at the GDT result we see that Butter has gained most, with a good 5.5%. But looking more closely it seems the premiums are being paid for C1+C2+C3 and it loses value quickly further out. Europe is facing heavy pressure at the moment from stocks and low demand. We only expect these stocks to get smaller when the premium in the GDT goes down. AMF prices went up slightly, but are still trading at a discount v.s. butter. Either butter is overpriced or AMF is underpriced.

The powder market is as weak as we expected. WMP did manage to hold the same price as last time, but calculating it back to Euro with today's exchange rate we see a clear drop. The drop for SMP is a lot bigger with a minus of 2.3%. EU products even went as low as $ 2500,- / € 2290,-. It's a clear signal that the market isn't looking for more SMP.

Cheese also traded 3.3% lower although we don't think the results for cheese will impact EU prices.