DCA benchmarks: Milkfat market commentary week 39

Milk fat prices are under pressure this week, with cream prices declining faster than butter. Meanwhile, the AMF market shows a small increase.The situation in the butter market has remained largely unchanged for some time. High inventories are keeping buyers cautious, putting gradual downward pressure on prices. At the same time, these high stock levels have largely been priced into the market, limiting the scope for more substantial declines.The DCA Butter Benchmark (Northwest Europe) decreases by EUR €75 this week to EUR €4,030 per tonne, keeping it just above the psychological EUR €4,000 level. Butter is also being traded below EUR €4,000 per tonne, although this mainly concerns frozen product. Fresh butter is trading several hundred euros per tonne higher.Seasonally, butter demand would normally be expected to increase, but there are currently no concrete signs of this happening.CreamThe DCA Cream Benchmark (Northwest Europe) decreases by EUR €275 this week to EUR €4,815 per tonne. The decline was driven by a relatively large volume offered by a single seller in the spot market. Demand for cream from the fresh segment has weakened following the summer period. Despite the decline, cream remains relatively expensive for butter producers.AMFThe DCA AMF Benchmark increases by EUR €10 this week to EUR €4,925 per tonne. A wide price spread is visible in the market, depending on the age of the product and the production method used.