Bearish Butter

Yesterday we had an active day with a lot of butter trades brokered between our partners. And with prices dropping further down south we are nearing the price of € 5000,-. A psychological price that has acted as a resistance last year during the first 8 months and as a floor in the last 5 months. The question is what will happen if we break this support price? Among our partners we see to steams, those who believe that the € 5000 will act as a solid floor, and those who think the bottom is far from in. 

In the morning we still managed to close deals at levels between € 5250 and € 5300, but these prices disappeared fast as soon as cream prices started to drop further down. Cream prices traded on average between € 5850 and € 5950 during the day, but we heard prices as low as € 5750 for a few spot loads even. For butter, we booked prices for Feb as. low as € 5100,- March prices went as low as € 5150 and for Q2 we brokered roughly 600mt between € 5200 and € 5220 only to close the day as low as € 5150.

Liquids in general felt softer across the board. Raw milk prices we see between 37ct  and 40ct and smc prices also eased back a bit and ended up trading between € 2050 in France and € 2250 in the Benelux. Prices for liquids are still holding up relatively well, but speaking to most traders on liquids, most anticipate more available SMC and cream in the next weeks. One of our regular partners indicated that he only expects the market to see some increasing demand again around the easter period (beginning/mid-March). Up until then, prices for liquids are expected to slowly ease back week per week (and with that the commodity prices)

With the rush in the butter market, we had little time to focus on cheese and smp prices. But somehow it seemed these market are not that active (yet). Those partners we spoke to confirm our market outlook. We see pressure on the cheese market, although sellers prefer to sell March/April over February, therefore speculating still on more supply. So far the age of the cheese remains young, although spot demand is drying up fast. The powder market is stuck between reality and expectations with more offers coming, and less bids remaining.