in our Weekly Wrap-Up we share with you what we have seen happening and trading in the market.
Volatility is back in full swing. The powder spectrum is weak, driven by lower international prices.
On the milk powders, NZ remains competitive and the US and EU try to follow. This has caused a significant correction of SMP and SWP prices in Europe the last weeks.
Butter is very bouncy. It's interesting to see is that when prices correct downwards, the forward premium hardly reacts, but when prices move up, the forward curve steepens immediately. A sign the market generally believes in a firm(er) market ahead. Even with valorisation of 50ct/kg?
Butter - Sweet cream butter has been sought after for the last few weeks, but lactic butter followed the bullish trend.
All of this doesn't seem to be driven by end user demand. High cream prices are the norm in the low season, but it seems like no one wants to miss out, especially with last year's levels still fresh in memory..
Prices spot between EUR 5400-5600, premium of EUR 200-300 per quarter forward.
SMP - While butter is moving up without much demand from the end users, SMP is moving down without much sales pressure with producers.
European SMP moved into non-competitive territory on the world market, which is typically not lasting very long.
We see sales pressure, especially for older (hedged) product. Q4 Codex around EUR 2480FCA, Q1 around EUR 2550FCA.
Lower bids for older products are usually successful.
BMP - Export demand is a bit better, depending on the origin and brand. Prices between EUR 2200-2400FCA for EU origin.
SWP - Quite a mixed picture. WPC feed, SWP feed are weak. Some food SWP origins are weaker, some stay stable, depending on functionality and outlets.
But with the current weakness in SMP, it's hard to imaging SWP will remain firm. Especially with cheese valorizing best at this moment.
As usual, if you would like to know more please don't hesitate to contact us!
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