Bored Traders Waiting for a new Impulse

Yesterday the market started slow with little activity. With only a few small trades here and there it seems most of our partners are looking for the next impulse that could move the market in a new direction. But as long as that impulse stays out most are focused on anything but buying and selling commodities. 

The first impulse could come from this week's GDT. With futures forecasting higher prices the market seems to prepare again for higher trades. But as said in many reports, we feel the buying appetite we see on CME/EEX and SGX futures doesn't really reflect the buying appetite we see in the physical market. That said the previous three events have surprised us, so we are prepared for a new surprise.

Looking at the futures it seems the market is expecting another 4-5% move upward. Stating we are sceptical about this prediction would maybe initiate a few laughs among our readers as we have proved to be underestimating our forecast v.s. the actual results for a few events in a row now. But to be clear, the market moves just don't reflect the feedback we get from our partners.

We would expect that SMP will make the biggest move tomorrow as this trend seems widely carried throughout the world. We keep having a hard time understanding that SMP prices might trade up to $ 2800 if we still receive feedback from buyers buying products for Oceania at $ 2550 $ 2700 CFR SE Asia. With these offers still around we would expect buyers to source outside of the GDT for the upcoming events. SGX Futures seem to predict a 4-5% increase, but we think a lot of the upward price movement is already behind us and would be surprised (again) to see such a move.

For WMP the futures predict a similar increase, we don't broker that much WMP but speaking to our partners we understand they just don't know where this increase is based on. Demand for WMP isn't spectacular. A 4% increase would be a surprise fo them, most expect a more flat result.

Looking at the AMF and butter SGX futures, we should also expect an increase. Looking at EEX and CME butter futures we expect the upward trend to continue this GDT as well, although we are also sceptical if the forecasted 4-6% increase will be made. We do however expect a positive result for the fat group.

Meanwhile, the EU market is described as stable, in balance, calm and boring. Not the words most of our partners prefer to hear, but it seems to be a warm welcome for most of the producers and end users. Volatility is good for the traders, and us brokers thrive best with some volatility as well. It seems that we all get a bit restless from such a stable market. But taking a bit of rest would not be such a stupid idea. Because we all know that volatility never leaves the market for a long time and usually comes back more extreme after longer periods of stable trading.

Therefore we have decided to travel a bit in the next few days. We will be a bit harder to reach by phone and have limited access to our email. So it might take a bit longer for us to revert on questions, bids and offers than you are used to.  We will be back on Monday next week! in the meantime Linda den Ruyter will be following up on all the requests, she is reachable via linda@getfairdairy.nl or on +31620059342