25 May 2023: Where's Wally?

Actually, I was going to entitle this week's Milk Monitor ‘Crowded Market’, but couldn’t resist this image. The theme is that there seems to be too many smaller traders jobbing smaller lots of milk powder round the market than the bigger players would like, preventing them from hiking the market to levels above the cost of production. In short, there’s still too much whey powder sloshing around, despite the uptick in global demand, delaying the inevitable rise when the supply glut is absorbed.

Sweet whey remains unchanged at €640 on the Dutch market, only €10 above the record recent low. Skim milk powder quietly rose getting on for 1%, up €20 to €2260. However, fats generally are decreasing in the face of lower demand, even though that market is devoid of middle market traders. The exception is whey permeate, as reported last week, as with some towers throwing in the towel, prices have hiked this week.

The only thing that background markets are telling us is that while proteins continue to plunge in the face of mega soya crops predicted for both American continents (who knew??), veg oils are hanging on the coattails of crude oil, which posted 2% increase over the week.

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

11 May 2023: Sideways with attitude

The weekly struggle to source an original picture landed this week on an actual picture, as we used to call films. 127 minutes of life that I’ll never get back, but it did give me a finer appreciation of Pinot Noir.

The headline and real markets are in a right old muddle, as this week we see sweet whey rise €30, but not really, and skim milk fall €60, which it hadn’t really gone up by last week. The bald fact is that the feed market bimbles along below the edible market, the discount depending on the buoyancy of global edible demand. Then there’s the off-grade market, edible product that just missed meeting spec, on nutrient or colour analysis, and this is what the feed market was starved of as the edible skim market raged higher last year. Now it’s payback for the greedy processors, as there is masses of off-grade product sloshing around the feed market, and whenever a slight recovery is seen in the headline market, real prices remain unchanged.

However, global demand has been much more brisk of late, probably explaining why the real market is not decreasing. Individual manufacturers in the milk replacers market are offering discounts or reducing prices on the back of plentiful off-grade supply, but these are unlikely to fall much further in the face of increased demand.

Crude oil has turned around about 5%, being chased by soy and palm oil, but with no genuine support in the face of expected downturn in the Chinese economy.

Looking at sweet whey, this graph is interesting, as the differential between the US and the European markets changes place over the 15 year period.

Skim milk shows the most significant effect of the pandemic followed by the war, and illustrates well the oversupply of off-grade material.

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

4 May 2023: Spoofing the market

Somebody’s messing with the skim milk market, as the Netherlands is posted as €100 higher this week (+4.5%), but Germany is unchanged and France reports €50 lower. It certainly could signal a bottom in the market, as there is now much more buying activity from Asia, especially as China is looking for more non-soya proteins, and Central Europe is definitely more active in buying. Supply is still plentiful as stocks are slowly depleting, but definitely no longer building.

Sweet whey carries on sideways, with nothing further needing to be taken out of the price, as demand is now much more brisk.

Crude oil’s decline is the backdrop of palm oil drifting lower, as biofuel mandates reduce value, and India has switched to more reasonably priced sunflower oil. Soya oil is surprisingly unchanged, but no doubt under pressure as a humungous Brazilian soy harvest of 159 million tonnes is predicted for the next crop, 2023/24, on top of this year’s bin-buster.

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