DCA benchmarks: Milkfat market commentary week 40

Price pressure in the milk fat segment continues this week, with butter falling below the psychological threshold of EUR €4,000 per tonne. Persistently high stocks continue to weigh heavily on the market.Butter prices have now been declining for four consecutive weeks, following the steady upward trend seen during the summer. The DCA benchmark for Northwest Europe decreases by EUR €85 this week to EUR €3,945 per tonne, its lowest level since early August. The downward trend is particularly evident in frozen butter, where stocks remain persistently high. Fresh butter is trading several hundred euros per tonne higher.Producers are hoping that demand ahead of Christmas will help reduce stocks, allowing the market to enter the new year with lower inventories. The imbalance between supply and demand has now persisted for more than a year. For the time being, however, there are few signs of a meaningful increase in demand. Buyers remain cautious, according to market participants.CreamCream prices are also under pressure, with limited trading activity on the spot market. Demand is subdued from both the fresh segment and butter producers. At the same time, supply is not particularly high either, as milk collections move towards their seasonal low.AMFThe AMF market is following the movements in butter and cream, although at a more moderate pace. Demand is also limited in this segment. The DCA benchmark decreases by EUR €25 to EUR €4,900 per tonne. The trade activity is described as limited.