Daily Dairy Digest: 24th of January

Monday the 23rd was a calm day for the dairy market from our side. Buyers and sellers decided that it was a good day to reflect on what happened in the previous days and determine the strategy for this week. But even the sellers seem to agree that the direction we will trade will be to lower levels. A producer told us they could only offer later this week, but our buyer should not worry, the price would only get lower towards the end of the week. Admittedly he was joking around a bit, but we learned that in every joke, there is a bit of truth. The way up indeed seems very unlike. 

And there is little news out there to report. International markets seem very calm and quiet and waiting for an impulse. The lack of buyers is the main topic we speak about. For all commodities, our sales side of the market is well represented, but the buyers are all waiting. The argument from some sellers is that is risky for the buyers to wait until the last moment to cover their shorts, but we don't really agree. If they would follow this strategy in the period August - December, we would agree. Fresh production usually is lower than consumption. But this time of year (until June, July) production of commodities is usually a bit higher than the demand side. So finding goods around this time of year without sellers having the incentive to stock the product for later in the year should be quite easy.

Looking at the international market we see the euro/dollar fx rate reached its highest point in 9 months (1.0875), something that is also a signal for fewer export possibilities. Because as long as the international market follows the European market decline but the fx rates go up, the EU's export position isn't getting any better.