27 April 2023: I'm sorry, I haven't a clue ...

As long-suffering readers already know, the markets conspire to make an idiot of me within a week of publication. And so it goes this week, with sweet whey going down, as I said it couldn’t, and skim milk going up, as I said it wouldn’t! Even my friends at Lacto Production are at a loss to know what is driving it, but here goes anyway:

Whey is down a paltry €10, but still -1.5%, but skim milk at up €50 is 2.5% higher. This really does look like a false dawn, as crude oil has tumbled nearly 4% this week, and taken biofuel with it. Soybean Oil is down to 50 cents, best part of 10% over the week, and palm oil has really fallen out off bed, now below the previous low of October 2022, below 3500 ringitts, taking a bashing from crude oil, plus EU tightening deforestation legislation.

Still a hand-to-mouth buying signal, but keep a weather eye through May, Harold Macmillan's ‘Events, dear boy, events’ may flick the pinball of politics off the flipper of history.

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

20 April 2023: Balancing

This week was an action replay of the week previous, as sweet whey stood still while skim milk shed another 2%. Whey at €640 is €80 under the cost of production in a state-of-the-art facility, which would be way higher for most of the ageing dryers throughout the industry. But stocks just aren't moving, and whilst the gloomiest predictions reckon September could be the earliest the market will return to profit, some say the turnaround will come in June.

If we look at protein value, whey costs €640 with 11% protein, which extrapolates to €1920 for the 33% protein in skim milk, which is €200 under the current skim price, so if that metric works, and it rarely does, that could be the bottom for skim. What is staggering is looking back exactly one year when skim peaked at €4200, to see it now halved in price and expecting further losses.

Both soya and palm oil shrugged off largely bearish factors to remain broadly unchanged 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

14 April 2023: Heads in sand at the bottom?

Both sweet whey and skim shed 3% this week, whey down €20, skim €80. The lynchpin is Chinese demand, or rather the continued lack of it. It seems stocks of high priced whey powder bought at much higher price last year is fighting for its place in feed rations, against relatively cheaper grains and proteins. Geopolitics is also at play, as recent Chinese legislation to limit the reliance on and use of imported proteins, which is further distorting the supply:demand equation.

Background markets are pretty flat, soya suspended in midair by the imbalance between northern and southern soya crops in South America. Veg oils drifted by about the same percentage as milk powders, palm oil juggling poor exports against reducing inventories that are weather-related.

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