The Daily Update: Floor found, small bounce?

We are almost getting used to reporting lower trades, so we are happy to report that today the market found a floor and is even looking up a bit. Not all products are equally steady, but the general sentiment is that prices have corrected down hard enough and need to stabilize for now. We still see the same weak fundamentals but at least for one day, most sellers were comfortable with keeping their prices where they were yesterday. 

It seems the start of November is no different than the start of any other month. We see that end users are sending forward their requests for December and this is putting a bit of a floor in the market. We also see buyers for Q1 start to ask for more quotations, although the feedback remains the same: "Too expensive!". But at least there is some demand to talk about.

Looking at the prices in the US we see a similar move. Prices for butter, SMP and cheese all traded higher at the CME and EU EEX prices are also trading quite a bit higher. Most seem to think these trades are buyers/traders locking in taking profit, but in these volatile markets, we advise all to keep a keen eye on the market as we have been surprised in the past before.

The Euro/dollar exchange rate is in favour of a bit more export that could help get some pressure off the market. The same counts for Algerian buyers (ONIL expected) are back in the market giving a small boost to the markets as well.

But we still think that the oversupply issue is greater than producers anticipate, especially with high pay-out prices to farmers for the milk. And once we hit the flush, lowering the milk price won't have any effects until we reach Q3.Q4 of next year.