Sellers Calling, Buyers on Hold

Yesterday the week started off with a bit of acidity. Sellers for butter, cheese and SMP were on call early in the morning to express their selling interest. The offered volumes remain small, but we do see that the quantities that are available can trade at a lower level. But with buyers calling, we noticed a lot of buyers were busy and put us on hold, with the promise to call back today. If they will we have some great offers to share with them. 

The biggest change we see is that the amount of suppliers calling to offer volume is growing. In the previous months, we usually see traders taking the lead, but now it seems that producers making the first move forward to get the best bids out of this market. Buyers were already a bit reluctant to buy last week, and it seems most are getting the confirmation they were looking for that supply is going to be dominant in the next weeks, and that they might hold a bit of leverage. So with sellers on call, buyers are clearly putting us on hold.

During the day we heard EEX futures also weakened a bit again with the forward curve taking another dive. Especially butter futures are softening with Q3 traded as low as € 5650 (if we are informed correctly) and Q2 as low as € 5425.

With great interest, we now have our eyes on the market for liquids. If producers start selling products at lower levels without finding many buyers, we would expect liquids to follow a similar pattern. If so prices for raw milk, smc and cream could get under pressure and amplify the bearish effects we see on commodities.