Week 42 Commodity Roundup: Weather forecasts, acreage cuts, and milk output pressures
Market conditions are shifting across agricultural commodities this week. Weather patterns test global grain production, dairy surpluses drive European cheese prices lower, sugar trades at critical support levels, and sunflower oil climbs on deteriorating crop forecasts. Meanwhile, coffee futures pull back from recent highs and the weight loss drug trend reshapes protein demand across the food industry.
Read the weekly developments below 👇
European cheese prices fall as milk production surpluses mount
European cheese prices drop across multiple varieties as milk production runs 5-7% above last year's levels. Gouda decreased to €2,970/mt, Mozzarella to €2,900/mt, and Cheddar to €3,600/mt. For procurement managers covering Q4 needs, the market doesn't feel like it's at the bottom yet, with buyers waiting to secure remaining volumes at potentially lower prices.
European sugar prices trade below import parity while 2026 acreage faces potential cuts
European sugar prices now trade below the import parity threshold of €586 per tonne, with Germany at €557, the Netherlands at €550, and Poland at €530 per tonne. Early indications point to a 3% reduction in 2026 plantings in deficit regions, creating longer-term supply uncertainty despite favorable 2025 harvest conditions.
Indonesia's B50 could disrupt palm oil supply
Indonesia's proposed B50 biodiesel mandate is creating uncertainty in palm oil markets as the country considers restricting exports to ensure sufficient domestic supply. The policy shift would require an additional 3 million metric tons of palm oil compared to the current B40 mandate, while global production is expected to increase by only 1-1.5 million metric tons.
Sunflower oil prices climb as crop forecasts deteriorate
Sunflower oil prices increased to $1,360/mt at Ukrainian ports as crop forecasts deteriorate. Ukrainian production estimates dropped from 13.5 million tonnes to 12.45 million tonnes, while Russian forecasts also declined. All but one of 13 market participants expect prices to remain strong through November, suggesting the window for favorable Q4 pricing may be closing.
Dry European weather and China frost risk test global grain outlook
European grain production faces dry conditions while China's corn and soybean belt prepares for potential frost damage. Global grain production estimates remain stable at 2,919.08 million tonnes, but Europe's wheat production already tracks 2.26% below USDA estimates. Extended dry conditions could tighten regional supply and create pricing pressure for procurement teams sourcing European grains.
Coffee futures decline 17.7 cents to 373.60 cents per pound
Coffee futures fell 17.7 cents last week to 373.60 cents per pound. Recent Brazilian rainfall exceeded 30mm with another 35mm+ forecast, supporting the 26/27 crop which consensus suggests will beat the last two estimates by at least 5 million bags. Prices are expected to test 370 cents this week, with potential to finish around 360 cents.
FMCG players are using protein in response to weight loss market
Major FMCG players are adjusting ingredient sourcing as the GLP-1 weight loss drug market grows from US$49.3 billion in 2024 to an expected US$157.5 billion by 2035. Nestlé, Starbucks, and Danone have launched protein-focused products targeting GLP-1 users, driving exceptional demand for whey proteins with significant procurement implications across the dairy supply chain.