Initially there was an immediate reaction following the GDT results and the ONIL outcome last week, with prices trading lower but that activity was short lived and the market has become less active again since. Regarding ONIL, quantities allocated to EU were better than anticipated but on the whole represent a strong decline year on year for total EU dairy exports to Algeria. From what we gather, Fonterra has booked 2000t SMP at $2150/t and EU 26,000t at prices between $2150 and $2250/t, which works out to €1750-€1800/t FCA EU plant.
Looking at the price developments of the commodities, the increases in milk production and the Coops that have minimally reduced milk prices during April and May to give farmers a head start for the new season, it could be expected that June will see a steeper drop in pay out prices than in the previous two months. That said, it is interesting to make a comparison between the last week of 2014 and today’s prices of commodities versus milk prices:
The Dutch quotations are a reflection of the week past, whereas the TMV values are calculated on today’s prices. From this week onwards we have made some changes in the TMV mix. Instead of SWP we now calculate with wpc35 for the whey component and we have added a TMV for WMP. The cheese/whey combination is based on Gouda foil cheese. Most prices went down this week after the GDT and ONIL news of the previous week. Most products mentioned above can be bought at lower levels than the Dutch quotations are indicating
