DCA Benchmarks: Milkfat commentary week 20

Milk fat prices continue to move higher overall this week. Notably, the cream benchmark has now moved above the butter benchmark. Despite the rising prices, many market insiders remain bearish about the outlook due to persistently high inventories. The benchmark for cream in Northwest Europe rises by €390 this week to €3,985 per tonne. The Dutch benchmark has even moved back above €4,000 per tonne. Price increases remain strong, although the market is rising slightly less aggressively than last week. Historically, cream prices tend to strengthen further in the coming period as seasonal milk supply starts to decline. Butter up and downThe butter benchmark increases by €20 to €3,830 per tonne. Butter prices have shown a mixed pattern in recent weeks within a relatively narrow trading range. Over the longer term, insiders remain cautious about further upside potential as inventories are still considered high. In addition, butter production remains elevated during the seasonal peak in milk supply. Butter consumption is typically stronger in the second half of the year. According to market participants, this additional demand will be needed to reduce inventories and bring the market back into better balance. AMFThe AMF price shows a slight decline of €50 to €4,800 per tonne. Trading activity remains limited and inventories in this segment are also described as ample.