Low Necessity Leads to Low Activities

Yesterday the market didn't really show itself from its most active side, and it remains to be seen if the activity will return quickly this week. Reconnecting with our partners it seems clear that most partners have no necessity to sell or buy anything and are in the comfortable position to wait for clearer waters.

Speaking to producers it seems they feel very comfortable with their stocks and they seem to have sold enough for the weeks to come to keep in standby mode. The same can be said for buyers, they bought what producers were selling and they are keeping a healthy reserve for when the market turns tight. The lack of necessity leads to low activity in the day-to-day trade market.

Looking at the data that came out today we see nothing that would change our market view a lot. We did see that the French milk intake isn't showing the big deficit it had on a YoY basis as seen in the previous months. French milk intake is flat compared to last year, while German milk intake is still up roughly 2%.

News from China isn't boosting the confidence for next week's GDT. Most is our partners that participate in the GDT dairy trade are quite bearish as well. It's unlikely that the next event will be as weak as the previous one, but most still expect a negative result of -4% to 5%. If true it could cause a dent in the confidence we see among the producers at the moment.

All things put together an uneventful start to the week. But dairy can be a surprising commodity market.