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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:

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"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 ..." Greg Dunn

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    • Mar 21
    • 1 min read

21 March 2024: Ever get the feeling we’ve been here before?



Not long ago, either, last trip around the sun (Happy Spring Equinox, by the way). Skim fell nearly 2% (-€40) and whey 3% (-€20).

 

As big a fight that the processors are talking, they’re having to take lower prices on both products to keep increasing milk supplies on the move, while off grades continue to weigh on the market. The only two things heading in the other direction are WPC 80 and hydrolysed gluten, as the fire-damaged factory has not reopened on schedule, so supply remains restricted and the few competitors continue to name their price. 

 

The soy complex continues to ignore its global fundamentals and firmed further in the last week. Crude oil remains firm above £80, and soya oil has risen 10% since ether beginning of the month. Palm however has faced its facts (increased production, lacklustre exports), coming off the boil since last week’s highs. 

 

Currency is worth a mention, with the dollar plunging on soft inflation and dovish comments from the Fed, whilst today’s BOE announcement is expected maintain interest rates, which has brought the pound up to €1.1720, but expect fireworks if the rate is cut by even a quarter per cent.


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



    • Mar 14
    • 1 min read

14 March 2024: Groundhog Year?




They say markets never fall as fast as they rise, but this week’s exception is skimmed milk powder, down a whopping 5% (-€120), as the stockpile weighs more heavily on the market. Sweet whey isn’t far behind, down €20 at nigh on 3% lower. 

 

The theme of this week’s lecture is the re-run of Q1 2023, concisely shown in the two graphs below. I don’t suspect we will get into the silly season, approaching €500 for whey, but for now, further easing seems probable, unless outside markets or Far Eastern demand kicks in. 




 



Yet again, milk powders are contra-trading to the proteins market, which have rocketed to levels last seen at the end of last year, despite the bin-busting South American soya harvest. It has been led by USDA reducing the estimated crop size from unbelievably enormous to very, very, but veg oils have also supported by crude oil hitting $80/barrel due to various bullish factors, soya oil higher upwards of 10% and driving palm oil to levels not seen since Q1 last year, despite a plunge in exports.



 

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



    • Mar 11
    • 1 min read

7 March 2024: Cause and Effect




Sweet whey drops nearly 3% to €680 (down €20) and skim milk powder falls 2% from €2410 to €2360. 

 

We are told sweet whey is now below the cost of production. We also found out there’s rather a lot of stock about. We know that China isn’t back in the spot market and probably not for the foreseeable. Therefore, it is a reasonable hypothesis for driers to cease production and switch commodities. Only skim milk is in the same muddle, as there are copious quantities being thrown at or below the market price, with increasingly large parcels of offgrade material coming out of the woodwork. Now the Dutch December figures have been published (I did tell them to pull their socks up when I was over there last week), production is back up to nearly 5000 tonnes, which while still lower than average, supports the higher stocking theory. 




So what is the least unpalatable solution for the processors? Stand idle or produce at a loss. The answer to that question will dictate the longer term trend for milk powders, but for the moment, until stocks are mopped up, it looks like further easing, which in turn isn’t encouraging buyers into anything but hand-to-mouth ordering.

 

Soya is taking a breather in the otherwise downward drift, and palm oil follows suit, as crude oil is broadly unchanged. So no excitement from background markets.


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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