Supply fundamentals remain positive, as markets appear to be better adjusted to the COVID-19 situation and changes to buying behaviour by consumers.  

The EEX butter index is at €3,340/tonne with the Dutch quotation at €3300/tonne. The index is stable with retail solid but foodservice especially the restaurant sector affecting butter demand. Over 53,000 tonnes of PSA stock will be realised shortly.  The EEX SMP index is at €2,163/tonne, again balanced as exports are performing well. Other factors of note are that currency volatility has lessened but the EUR remains strong against competitors and oil prices remain below $50 barrel.

Prices recovered at the most recent GDT auction with WMP at over $3,000/tonne. Dryer weather was reported in October in New Zealand with output moderating (+0.8% in Oct and +0.3% on a MS basis). Strong Chinese demand is supporting trade. Cheddar demand again is stable with retail strong and foodservice affected by the second COVID-19 wave, especially in Europe.

The continued uncertainty over Brexit and expected administrative delays affecting trade with the UK in 2021 highlight the downside risks that continue to exist.