DCA benchmarks: Milkfat commentary week 15

While butter benchmarks are mostly moving sideways, the cream market is strengthening. Trading activity remains somewhat weak, according to market sources.The Northwest European cream benchmark increases by €195 to €4,340 per tonne. There are differences between countries. In Germany, prices are rising faster than in the Netherlands. This is due to relatively higher processing capacity for butter production.Although cream is still profitable for butter production, demand from butter producers remains limited. The butter market is still characterised by high stock levels. Producing for storage is not attractive due to high storage costs and limited upside in butter prices.Demand for butter in the second quarter remains weak. For the third quarter, when milk production is expected to decline, demand is stronger.DCA butter benchmarks are moving slightly higher this week. In the Netherlands and Belgium, prices increase by €25 to €4,105 per tonne. Cream prices are supported by stronger demand from the fresh segment, which is typical for this time of year.