Daily Dairy Update: Short one

Normally we take the time to write big reports on a daily basis, but for today we keep it very short and simple. The market seems boring from time to time. We don't see many trades and most partners complain about low activity and unclear directions. 

Looking at liquids we hear cream traded in a big range between € 5250 and € 5500, but it was described as very choppy. SMC prices are still firm between € 2100 fca and € 2300 DAP Poland. Raw milk on the other hand seems plenty available between € 0.33 and € 0.37.

Butter demand is non existing for closeby. Spot demand from end users is very low and demand for Q4 also is starting to aim at lower prices. We didn't trade any butter. Our most concrete buying interest is:

• 5 trucks Irish butter Q3 at € 4600 DAP Germany
• 6 trucks NL/DE/BE Q4 at € 4800 FCA
• 6 trucks NL/DE/BE Q1 at € 4900 FCA

We have offers for all roughly € 100,- higher.

Cheese is showing a different picture. Spot offers are now again harder to find although buying interest for closeby isn't great as well. It seems producers will be aiming at higher prices in July, the question remains what justifies a higher price if butter and smp remain bearish? Cheese has the tendency to lag about 3-5 weeks on the butter market. If true we should see a correction in the next weeks. Also looking at the worldwide trends for dairy commodities we would expect lower trades. We hear mozzarella trades between € 3400 and € 3430 fca for June, for Q3 we expect to find similar bids.

Powders are still a bit under pressure, we traded roughly 400mt yesterday between € 2450 and € 2525,- mostly over German origin. Our most concrete market here is an offer for 72mt of German SMP BigBags at € 2400 first half of July collection.

It remains difficult to predict the price moves for SMP as SMC remains expensive and futures have high bids. But looking at spot demand, stocks and the CME/NZX futures we can only expect the EU market to follow the downtrend. The CME is testing a strong support again around 115. From a technical analysis, this is an important price to hold, otherwise, we could see lower prices.

So the market in general feels a bit boring. With cheese being the only product with steady spot demand. SMP and butter are, in our view, preparing for lower prices as demand from the EU and the world market remains very calm.

Tomorrow we are back with a normal update.