Sellers Want More, Buyers don’t Need More…

Yesterday the market felt a bit two-faced.. again.... A positive GDT, higher prices for some liquids and declining milk volumes all point to a potential reversal in the market. So we see that all our sellers increased their sales prices as the expectations for prices are all revised up. And although we see that for liquids (and day fresh products) buyers have no choice but to accept the higher prices, our buyers for commodities that can be stored aren't flinching. The question is where to find a buyer who didn't need anything at the lower prices from last week, but does need something at the higher prices from this week. One of our partners described it best: "The sellers want more, but the buyers don't need more..."

Looking at the market for liquids we do see that we are at or just after the lowest point in milk collection this year. Raw milk prices are all well above 40ct, DE/BE/NL milk trades around 43ct, but in France, we hear prices up to 52ct. In France, the cream also is the leader in the EU. Prices well above € 6000,- were mentioned in the morning, although we did hear prices eased back a bit again at the end of the day. NL/DE cream also traded up toward € 6000 levels in the morning, but we also heard deals done between € 5600 and € 5800 at the end of the day. The price rally doesn't seem to be demand-driven as we hear there aren't many buyers in the market, but the supply side is even weaker, still creating a shortage.

One thing we did see that SMC and whey concentrate prices fell a bit back. And for those who read our report every day, you know we are keeping a close eye on the whey concentrate market. If the market continues to lose price this could indicate more cheese production. Because we do think that the higher demand for SWP should keep SWC up instead of bringing it down. But one week of lower prices doesn't mean we have a new trend. But it is something to watch!