AHDB Dairy is reporting a 'wait-and-see' attitude, where UK wholesale dairy markets are concerned for the month of June.
Trade was very thin for all commodities due to a mixture of tight supplies and a stand-off between buyers and sellers. Dairy market dynamics are unusual at the moment. Last month, prices increased while milk production was hitting peak stride.
However, this month's production has eased off, dry weather poses concerns and stocks are still tight, yet prices, for most products, have eased as the month has progressed.
This has also been seen in the spot milk market. Spot prices have risen from around the mid to low 20s to pushing 30p/L, if not over.
Butter eased through the month with buyers seemingly waiting for prices to come down. This sentiment appears to have come from not long being past flush production and futures providing an unclear picture of what might happen.
A clouded picture
However, lack of trade clouded the picture further, making it difficult to distinguish the difference between quoted and traded prices.
Cream prices were all over the place in June, as thin trade meant prices were varied depending on when deliveries needed to be made, and how much product was required.
Prices started the month anywhere between £2,400/t and £2,500 before falling towards £2,100 and £2,200. Some traders felt prices eased at the start before falling quickly in the last week or so. Others felt there was a constant step change through the month.
For skimmed milk powder (SMP), the momentum died out slightly over the month despite a lack of available fresh product. Prices started well before easing as the month progressed.
EU prices have become non-competitive with US product so prices re-balanced somewhat following on from the partial revival last month.
Mild cheddar was the only product to maintain some level of firmness over the month. There was a difference in prices depending on quality but the market seemed fairly tight in June.
Availability continued to be tight and the feeling seems to be that more longer-term deals could be the way forward as producers do not want to produce extra for the spot market in volatile times.