DCA Benchmarks: Powder commentary week 23

Milk powder markets remain under pressure. Skimmed milk powder prices decline for the fourth consecutive week, while whole milk powder is also facing downward pressure. In contrast, the whey powder market continues to show greater stability.The DCA benchmark for skimmed milk powder in Northwest Europe declines by €130 this week to €2,710 per tonne. This marks the largest weekly decrease during the current downward trend. Weaker demand is the main driver behind the decline. Buying interest from the Middle East initially increased when the regional conflict escalated in March, but that demand has since eased. In addition, inventories in some areas appear to be more comfortable than previously expected.Producers are attempting to defend price levels, but trading companies are reportedly willing to accept lower bids. Earlier this week, skimmed milk powder prices on the Global Dairy Trade auction also came under pressure. As such, the recent decline can largely be viewed as a correction following the strong price gains recorded earlier this year.The DCA benchmark for whole milk powder also continues to soften, falling by €60 this week to €3,210 per tonne. Since reaching a peak in early March, prices have declined by more than €250 per tonne. The whey powder market remains more resilient, although upside potential appears limited for now. The DCA benchmark for Northwest Europe increases by €15 this week to €1,755 per tonne, following a slight decline last week. Market participants indicate that inventories remain relatively tight, while demand and sales opportunities continue to be supportive.