Dutch traders appear to be overdoing it in the cafés, as their grip on the reality of the sweet whey market seems to be fading. In a global commodity market that is sliding in pretty much everything apart from cheese and coffee, whey managed to increase by 3% (up €20), the same margin as cheese, from whence the byproduct comes. The more price incentive to produce cheese, the greater the supply of whey, and as liquid milk is pretty much stable, processors can’t have their cake and eat it, so the supply/demand equation for whey is tilted in the wrong direction.
Yet traders still claim to be storing what they can’t sell and firming the price accordingly. The outlying markets in Germany and Italy are well below Holland, more than the haulage differential, whilst France languishes somewhere in between.
At least skim milk remains unchanged, and freely offered, as are all other components in the milk blender’s armoury.
Soya is finally looking over the cliff edge, with beans now back into three figures for the first time in four years, at 950 cents. Meal spent a few minutes at $299 per tonne this week, and soy oil, the strongest of the three legs, is now firmly in the high 30 cents. The big surprise was a sharply increased global end stock figure of 134 million tonnes, so a fundamental revaluing of the crop in the light of modern input costs looks on the cards. The odd one out is palm oil, remaining stubbornly unchanged when crude oil prices are mid $70s and its own fundamentals are weak, never mind competing veg oils.
Sterling has finally climbed back into the €1.17s today and looks stable at the value, possibly more recovery to come, given the UK improved economy in Q2.
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
