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

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

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