Market Report - June 2014

Posted 03 June 2014

"Butter, SMP and Cheese prices fall 3%"

All percentage changes in this report refer to month-on-month price changes and are provided by Mintec.

EXCHANGE RATES

Against the $, Sterling opened the month at 1.67 and closed at 1.690.
Against the €, Sterling opened the month at 1.21 and closed at 1.217.

SOFT COMMODITIES

Prices for cocoa beans increased on the ICE (+1%) but remained unchanged on the LIFFE (+0%). In the UK, cocoa butter prices increased (+1%) reflecting continued demand from the chocolate industry, particularly from the emerging markets. Cocoa powder prices decreased (-7%) due to low demand and increased supply.

OILS AND FATS

Palm oil prices fell in Rotterdam (-4%), as news of higher monthly production in Malaysia eased concerns over the tight stock situation. Sunflower oil prices rose in Ukraine (+13%), due to concerns about political uncertainty in Ukraine. Ukraine is the world’s largest producer and exporter of sunflower oil.

Soyabean oil prices rose on CBOT US (+3%) and in Rotterdam (+1%) due to concerns over wet and cold weather slowing soybean planting in the US and tighter than expected US stocks. US ending stocks are estimated down 7% year on year to 3.6mt. Rapeseed oil prices fell in Rotterdam (-3%) due to favourable weather in the main EU growing regions. Palm kernel oil prices fell in Indonesia (-4%), Malaysia (-3%), and Rotterdam (-2%). Coconut oil prices rose in the Philippines (+5%) and in Rotterdam (+5%). Extra virgin olive oil prices rose in Italy (+3%) but fell in Spain (-1%). Lampante olive oil in Spain fell (-7%).

GRAINS

Global wheat prices were mixed in the past month with prices rising on CBOT US (+2%), in the UK (+2%) and on LIFFE Paris (+1%), driven by supply concerns from the Black Sea region and adverse weather in the US.

INGREDIENTS

Almond prices fell overall in the EU (-3%) and there are still concerns over the drought in the US. Spanish almonds also fell (-3%). Turkish hazelnuts increased (+21%) as severe frosts damaged crops, however, the total effect is not yet known.

Turkish raisins and sultanas, on the other hand remained unchanged (0%) on average in the EU, as the growing regions were not affected by the cold weather. Black pepper prices have been increasing due to tight supply; in India prices rose (+1%) as the season comes to an end, while Malaysian prices rose (+7%) in anticipation of the next harvest in June. White pepper from Indonesia and Malaysia also both rose (+6%) in the EU.

MILK AND DAIRY

EU milk deliveries have been increasing seasonally and remain up year on year, leading the price of some dairy commodities to fall.

EU Butter prices fell with prices down in the UK (-3%). SMP and WMP prices in the EU decreased, with falls seen on the continent and the UK (-3%). Cheddar cheese prices were down in UK by (-3%).

ENERGY

Prices for Brent crude oil on ICE London rose (+1%) driven by continuing tensions between Ukraine and Russia, the world’s largest energy exporter. Prices rose in Europe for petrol (+4%) and diesel (+3%), influenced by crude oil prices.

METALS

All base metals rose on the LME, driven by improving economic sentiment in Europe. Prices increased for aluminium by (+7%).


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