Welcome to the BDC agri blog. Here you will find reports from some of the events we attend, as well as Greg's popular weekly view of the UK milk and whey powders market:

 

"Many years ago, I got my first job in the dairy industry, as class milk monitor at Tollesbury Primary School.
I thought it was a job for life, but sadly Margaret Thatcher famously ‘snatched’ free school milk,
and the nation’s health has suffered since. Fifty-four years later, I am still musing on the dairy industry,
with an irreverent view of politics and currency ..." G
reg Dunn

Probably the biggest feature this week is sterling bombing out against the euro, now Daily Express readers appear to be controlling negotiations with Michel Barnier, and the currency markets have backed who they expect to win. It’s been a quiet week on the milk powders, with whey unchanged, but skim milk still trending north.

Put simply, whey supply is broadly in balance with demand, but the shortage of derivatives such as lactose and permeate continues. Skim, on the other hand, seems to be following an incline underpinned by continuing undersupply of raw milk that won’t go back into balance until October’s autumn calving glut kicks in.


There has been large scale buying this week, which has pushed values higher by €20 (1%) and this trend could easily continue for the next month or so. It doesn’t have the feeling of a runaway train, and when it does peak, it’ll probably plateau rather than dive. The main thing that may derail that supply:demand is a return to Europe-wide lockdown as temperatures tumble to optimum Covid infection, and the second wave reduces demand dramatically from the catering sector.


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

The market pendulum continues its upswing with growing momentum this week, with whey up €20 and skimmed milk powder a whopping €60, coincidentally both 3% higher on last week.

Looking at skim milk powder first, it looks like a return to fundamentals (at last), as the milk powder mountain sold out of Intervention in 2018 has finally disappeared (and ginormous profits trousered) and we’re back to pure supply and demand dynamics. Bull factors include a liquid milk market still in summer undersupply and autumn calving demand kicking in, but on the bearish side is the weak dollar meaning the Americans are scooping up global demand and leaving Europe technically long. Balancing those two forces suggests to me that we’ll see the September and October markets rise, but could see the market break before the more traditional year end downturn.

Whey is harder to read, but susceptible to the same influence of dollar weakness meaning the US will continue to snaffle whey business into S E Asia. That market is rebuilding fast after ASF, so the global supply v demand is supporting prices, and it wouldn’t surprise me if whey continued to rise, even if skim peaks/breaks.

The Pound is strengthening on little more than it isn’t the dollar or the euro, it seems. Maybe the Government’s 13th U-Turn will be to agree the Post Brexit trade deal?


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

Although I’m well known in yachting circles for running aground, my milk powder depth-sounder sensed the bottom last week, and with the return of autumn weather comes the buying interest, and up the market seems to be going. It’s not all seaweed-reading, the facts are that as the dollar has taken a pasting, and domestic milk powders are relatively cheap, US traders have stolen some big orders to Algeria and other markets that traditionally source from the EU. Couple this with low liquid milk production in Europe and the middle market forcing some arbitrage, and both whey and particularly skim look ripe for a bull run, possibly in excess of €100/tonne.

It has started slowly, whey is only up €10, and although edible skim milk is unchanged, feed grade has jumped €20. What is significant is that these rises represent the return of volume purchases, and as calf milk replacer orders for autumn calving come in, traders sense blood. As this peculiar year has seen feast and famine, then feast, and the cheap parcels of off-grade powders have disappeared, order times going into September could roll out to three or four weeks.


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

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    BDC agri is a trading name of Black Diamond Commodities Ltd, UK Registered Company No 06821585,