18 April 2024: Strongly sideways

Just a short one this week as I’m on the road. Market basically unchanged, so no price change on last week.

Whey producers are adamant their price won’t break €620, so are standing firm everywhere except Italy, where the largest processor is discounting, but not by the haulage differential to deliver to Holland.

Likewise skim milk is at what producers insist is the bottom for them top stay at break even.

Against that, production is flat out on both markets, so it all has to go somewhere, and bunging it in store and taking the pain later looks to be where the market might be taking producers.

Soya oil is down another 5% or so, and palm oil more so, given oil has been held artificially high. 

BDC agri is the UK broker for Lacto Production milk and whey powder products.

For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com

4 April 2024: Dead cat bounce or a genuine bottom?

An interesting week for milk powders, as we see sweet whey unchanged but skim milk bouncing €50 (+2.3%). The word on the wires carries on from last week, in that traders are buying, and have largely ceased offering, which has brought buyers out of retirement en masse, so a genuine sea-change in sentiment.

Outside markets are definitely playing a part, led by crude oil, which is approaching $90 a barrel. This is classic 'sell on rumour, buy on fact’ territory, as the rise is predicated on OPEC+ agreeing to cut supply further, ignoring the fact that the biggest inventory of them all is seeing stocks rising sharply.

The rise in crude oil has got vegoils excited, as soy oil has risen a couple of percent whilst beans and meal have decreased, but palm oil has put on over 12% over the last month. It is like an old western movie, someone shouted ‘Indians’ and the wagons swiftly pulled into a circle and up went the barricades. Indian palm oil imports have actually decreased to a ten month low, as sunflower oil has offered better value, but the betting is that the upcoming Eid al-Fitr festival will revive demand and sustain the higher levels.

BDC agri is the UK broker for Lacto Production milk and whey powder products.

For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com

28 March 2024: "Send three and fourpence, we’re going to a dance”

Borrowing from the centuries-old Chinese-whisper corruption of the front line message to military command, “Send reinforcements, we’re going to advance”, word hasn’t quite got round yet that the trader community is preparing for a spring offensive.

Having bumped down €20 a week for the last five weeks, sweet whey appears to still be on the slide, but I’m told traders are busily tucking away whey to store and cheaper offers are drying up fast, and this week’s €20 fall isn’t reflected in current offers. If we are still in Groundhog Year, we saw prices plateau at this level last spring, but it took until the end of the summer holidays before the great march north started, but the market is now so far below cost of production, traders are buying in to it now.

Likewise, skim milk shed €20, but again, the amount of offers, especially offgrades, has reduced, but possibly not with the polarity of the whey market, so we may see stabilisation in skim for a while.

Processed fats continue to rise and supply tighten, plus gluten, so that isn’t giving any help to blends. Soya generally is finally answering the gravity of oversupply, but soya and palm oils are holding on to plus $80 crude oil, so only drifting marginally.

One thing I do keep a weather eye on is gold, not that I have any. Interestingly, given its safe haven status, it actually went down in the months following the Ukraine war, but has now climbed to near record highs, up nigh on 13% YoY, of which over 8% has been during the last month, and 1.5% over the last week. 

Best of luck in your Easter Egg Hunt

BDC agri is the UK broker for Lacto Production milk and whey powder products.

For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com