Futures market indicator

Updated 10 June 2020

This indicates what those trading futures believe the supply and demand relationship could be over the coming months, based on how futures market returns compare to current markets.
  • Settled prices on EU futures markets increased through May, responding to higher demand as lockdowns eased in some countries.
  • Overall, the future milk price equivalent (FMPE) rose by 9.7% (2.69€c/l) in May.
  • On EU wholesale markets, May prices increased slightly for SMP but fell on average for butter, despite the rally in the second half of the month. This led to a marginal decrease of 1.3% in the value of EU AMPE compared to April.
  • The relatively higher upturn in FMPE turned the forward market performance indicator (FMP) positive, reflecting traders’ expectations of tight product availability in the autumn.


Frequently asked questions

What is Forward Market Performance (FMP)?

It is the market indicator we use to monitor the difference in current market prices and prices traded on futures contracts. It aims to show what those trading futures believe the supply and demand relationship could be over the coming months.

How is it worked out?

The FMP is a comparison between Actual Milk Price Equivalent (AMPE) and a Future Milk Price Equivalent (FMPE) price. These are quoted in Euros as there are no Sterling futures prices.

Actual Milk Price Equivalent (AMPE) is a market indicator for the dairy sector to provide broad, general estimates of market returns from producing butter and SMP.

FMPE also estimtes market returns from butter and SMP, but is based on futures prices from the European Energy Exchange (EEX). It should be noted that trade over the futures market is very slim and therefore these figures should be viewed as one indication of the market movements and not actual developments.

What does it mean?

FMP does not tell us how much milk prices will change by. However, it can suggest possible trends in prices.

FMP is the relationship between AMPE and FMPE. It is about the traders’ views of the potential supply/demand relationship in the future.

A negative figure would suggest traders believe there could be relatively high supply – so the market will become supply-focused. A positive figure would suggest traders believe supply could become tight – forcing the market to become more demand-focused.

Additional information

*FMPE is 4 months in advance of AMPE

From Jan-20 onwards the EU AMPE value is for EU (ex UK). Prior to this an EU-28 AMPE is used.     

If you would like to know more about Futures, please download our Back to Basics Risk Management factsheet.

Download the Back to Basics Risk Management - Futures factsheet