1 December 2023: No whey José

Not quite, but it is getting harder to find discounted material, despite the Dutch market falling back by €10 (-1.2%) this week (by the way, No Whey José is apparently vegan chocolate, so not a community that is competing for whey supply). Demand has been heavy, particularly from Asia, so despite the halt in the decrease, then the halt in the increase, whey does look well supported at current levels.

Skim milk powder is posted unchanged, but not seeing material being withheld to the same degree. However, the graph below is a bit surprising, and may support a genuine supply:demand dynamic pushing skim higher in the new year.

Production has plunged to its lowest level for three years, and by a large margin. Feed grade is only €35 discount to edible grade, more usually €100 plus, which usually indicates a reduction in supply (i.e. reduced production = less downgrading), so a reasonable hypothesis is for markets to trend higher.

WPC is trending higher, but still €400 lower than skim milk, an unusually large discount for a market controlled by very few producers, so another danger area for blend price increase.

Nothing much going on in background markets, US soya harvest is slightly ahead of the five year average, light and then heavier rain predicted for parched areas in northern Brazil, and palm oil is following soy oil’s sideways movement, despite predictions of slowing production.

Finally, the pound is recovering thanks to inflation falling faster in the Eurozone and the US, underpinning UK interest rates remaining the more attractive into 2024.

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

24 November 2023: Where do we go from here?

Another week of gently lifting powder markets, whey up 2.5% at €820 and skim only €10 higher. Talk amongst the milk powder community in this week’s VIV MEA in Abu Dhabi reckons the Dutch and Eastern European sweet whey markets are something like €50 over the French or Irish prices. Availability is generally easy, which doesn’t usually signal a bull run, but trader manipulation shouldn’t be ruled out.

Speaking of which, there’s some producer manipulation seemingly going on in the fat filled whey market. The largest free market processor (not for in-house consumption) has hiked that market €150 higher and is starting to withhold material, which is unsurprising given how far beneath the skim milk market that fat filled has been trading all summer. It is usually about parity with skim, but has been at €300-400 discount, which is now rapidly narrowing.

Nothing much going on in soya, Brazil is behind on planting in arid soils, and China bought a record 4 million tonnes of US beans in a week, but the general feeling seems to be that when it does rain in Brazil, the complex will ease accordingly, given the record acreage. Palm oil has had a rally this month, but is coming off the boil as the Chinese soya oil market in Dalian is down, and India is scaling back palm purchases in December and January.

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

17 November 2023: Hitting the buffers already?

Well, that collapse didn’t last long, one week to be precise. Whey is unchanged at €800, and SMP a paltry €10 lower. No reliable intelligence as to why, no withdrawal of offers or signal of dwindling supply. The only news is that one of the few wheat gluten processors went on fire, knocking the factory out of production for four months, so expect a rally soon in that element of fat blends.

Soya has been on a bit of a rally, due to heavy Chinese purchases of US beans and the rain forecast for central Brazil not arriving, knocking a million tonnes off the 2024 crop estimate, and counting. Meal rallied the most, up another $20, but all three pits have come off the boil in the last couple of days. Palm likewise has rallied to two month highs, but is now subsiding slightly.

Plunging inflation figures have pressured both the dollar and the pound, despite the hawkish interest rate sentiments of both central banks.

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