Colors reflect world market price movements in the week prior to publishing. Grey is 'no change' and in case of a white block, there is no information about price movements.
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Strong buyside appetite offsets equally strong supply side pressure
Markets have not entirely come to life yet as we are writing this report, but the recovery of dairy commodity prices that was already initiated prior to the Christmas period got some tailwind when the first GDT session of the year also yielded very positive results. Market participants are currently weighing the change in sentiment against the ongoing strong supply side performance, as visualized in our milk production graph. Sure, the buyside is currently quite willing to lock in significant volumes for later in the year, so we do feel that the demand side is able to offset a large part of the supply side pressure at the start of year. The big question that everyone is asking themselves is whether that balance can be sustained as we approach the Northern hemisphere peak in Q2. The second question is whether that will also be the moment that even lower milk prices than the current ones will be able to discourage milk output.
Exchange rates used in this document: Nov EUR 1 = USD 1.152; Dec EUR 1 = USD 1.167; Jan EUR 1 = USD 1.167