Cheese
Prices appreciate in the EU and the US
Europe
Tightness in fat boosts cheese prices in the EU
The positive sentiment in the fat market has been spilling over into the EU cheese market. Mozzarella prices appreciated to EUR 4100-4150 ex works for spot deals with Q4 delivery at a premium of EUR 100. Even Q1 deals have been booked at EUR 4150, which is remarkably high as mozzarella usually sells at a discount during the winter months. Exports to South Korea and Japan are quite attractive at the moment. Gouda and Edam are also in good demand and the general age of delivered cheese fell by ten days to regular, indicating that stock levels that had been on the rise in the past months are now getting back to normal. Futures prices were driving physical markets up, as they did in Mozzarella, to a level of EUR 4100 for August/Sept deals and EUR 4300 for Q4, both ex works. Cheddar prices appreciated as well, to EUR 4350-4450 ex works for spot deals and EUR 4500 for Q4. Demand was quite strong, particularly from the processed cheese industry. For all cheese types there may be further upward potential because of the seasonally shrinking milk production and the good demand outlook.
Americas
Thin spot market creates some range-bound movement
Commodity cheddar production tightened as good export opportunities for Mozzarella and Gouda type cheeses triggered additional allocation of milk to these production lines. Demand on the whole is good, although foodservice stays behind a little. Exports to Mexico are rather strong as well and thus the market has a certain balance. The spot market is somewhat thinly traded as most parties have covered a large percentage of their trades by contracts. Blocks and barrels currently trade at parity in the range of USD 1.90-2.00/lb (4300-4400/t) ex works in fluctuation with the occasional firming and softening of demand.
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