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Overheating and Cooling Down

2 min read
  • Butter
  • Cheese
  • Powder

Yesterday the market continued its strong volatile run, but again it was just the butter market that showed any livelyness. The cheese market seems incredibly stable with sellers and buyers both not trying to boost the price up or bring the price down. The market for powders just seems to be trading sideways as nobody foresees much lower prices but nobody expects an uplift in the next weeks either. So it seems all the speculation is put into one single commodity; butter! And as we have no new info for cheese and powders we focus this update just on the butter and come back on cheese and smp tomorrow. 

We started this morning with a lot of buyers looking for offers and we traded up to the level of € 5625,-. Immediately after we informed the market about this trade sellers came to the market looking to close more deals at this price. Quickly the market traded down back to € 5550 only to trade down to € 5500 in the afternoon. Spot sellers also came to the market for February and March but with prices offered initially at € 5500, we traded back down for February at € 5300.  Its seems the best medicine for high prices, are indeed high prices.

The cream market shows two different faces. Asking the traders and factories in the west of the EU we see cream prices trading between € 6000 and € 6100. But speaking to our eastern EU partners we hear cream prices up to € 6300 (and some even higher). But that the market is facing more liquids seems to be non-debatable. We hear the availability on raw milk is going down and prices are starting to decrease as well. Prices are now just over or just below 40ct. SMC prices are also decreasing with prices in the morning above € 2100 and at the end of the day just over € 2000 in Germany and NL and just under in France.

All things put together we think its safe to say that both sides of the market tend to overreact to the butter market. On the way down buyers pushed the prices too low, creating a short squeeze. But at butter price levels above € 5600,- selling interest from all corners of the EU appears and it pushes prices back down. Let's hope the butter partners can find an agreement as our cheese partners did and find a common stable prize to trade on.

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