Low activity, higher targets

The market yesterday was a bit boring from our side. We see very little activity from our regular partners as most of them do not have a strong opinion about the market, and are in no hurry to buy or sell anything. The activity in our network seems to be cooling down fast as most are waiting for clearer waters to set their new direction. In addition, we lost our voice (no ability to talk on the phone) so most of the market conversations needed to go by WhatsApp, email or while whispering on the phone. 

The day started relatively active cause prices for liquids (cream, SMC and raw milk) started off strong. Cream traded as high as € 5400,- boosting the demand for butter for Q3 up to € 4850,-. But after an ok start, the market cooled down again whilst waiting for the GDT results. The cream seemed to cool down a bit at the end of the day, the same for the other liquids.

The GDT didn't show a spectacular result. With a minus of 0.9% there is a bit for everyone there to find what they like. Butter moved up 2.2%, so the bulls have their argument for higher prices. But a pessimist will (and did) argue that the offered volumes were reduced and looking at AMF the demand for fats isn't as good. SMP prices also have a bit for everyone. European sellers will argue EU products moved up towards $ 2670,-. But those bearish will point to the lower traded NZ prices and the change in the euro/dollar fx rate. WMP traded almost flat but performed a bit weaker than expected.

As said, we don't think yesterday's result will impact the market much. Movement needs to come from real demand from end user or offers from suppliers. Both seem confident and calm to wait out the moment.