“A Taste Of Their Own Medecine”

Yesterday we had quite an eventful day again. The butter market continued its strong rally upward, and the bullish sentiment seems to spread towards the cheese and the powder market. Buyers are getting nervous and some decided that they rather pay € 500,- too much today, than € 1500,- too much in two months. Some don't care if the market goes back down in two weeks, they just want to be able to sleep well at night, not worrying about the increasing markets. 

It's this nervousness among buyers that is creating the heated rally. And sellers are now playing out the same strategy as their counterparts have done in the previous weeks/months. They sell small volumes, and every sale needs to be done at a higher price, just as buyers only bought small volumes on the way down, and every day at a lower price. One producer told us he is happy that buyers are now finally getting "A taste of their own medicine", or as the dutch would say it "A cookie from their own dough". And although most producers aren't that vengeful, we do see that they enjoy being back in powder a little bit.

But as we told the buyers when they waited too long, we are now telling the sellers. Please be careful to not miss your opportunity! The market might feel bullish for now, but we still get reports of full warehouses, thick milk, low exports, low consumption and delays in some sectors. Just as the buyers have missed their best purchase price, sellers should not gamble to sell the top and wait for too high prices.  Fundamentally we still have more supply for the next 5 months at least, so buyers should not have to worry that they will not find any product.

But it needs to be said that it is still mainly the butter market that is pulling this market. Cheese sellers try to go up with their prices as well, and we do see buyers at slightly higher levels. But we can't really see a rally yet. The same we see on the powder market. Some sellers try to go up with € 150-€200,- as they see markets firming, but we wish them good luck selling at higher levels on the export markets.

We did get a lot of feedback on our writing yesterday, and we are thankful for every feedback. We know we can't please everyone every time with our views, but we write down what we see. But in that lies a big key, we write down what we see, and that is only a small reflection of the market. We speak with a lot of counterparts, but we will miss key elements in our analysis. So please keep sending us feedback about the market and about the parts we don't see and report about, it only makes our updates stronger! For today we wish you happy trading and bye-bye!