6 April 2023: Flatlining

A short report from a market with no news. Situation unchanged, ample stocks of all milk powders, no sign of any potential hike or slide.

Background markets are quiet, veg oils got a spurious lift riding shotgun on the 8% hike in crude oil, due to perceived biodiesel demand, but that died down quickly and we’re back to unchanged.

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

30 March 2023: Market lacking direction

Another week of drifting in milk powders, whilst proteins and oils enjoyed a bounce. The headline Dutch sweet whey market posted unchanged again, whilst skim milk dropped a smidgeon, less than 1%.

The truth is that there are desperate sellers out there who will discount whey for spot delivery, but the forward market remains fixed as traders' risk is factored in, storage, finance and potentially double handling. Most processors and their customers' purchases exclude them from benefiting discounted material, so if or quite when the whey mountain could seriously reduce prices remains the consumer's gamble.

Skim is not in the same muddle, affected much more by the potential for dumping from the global edible markets, as processors are trying to protect their margins in their primary market.

Linked to the weakness in whey, whey protein concentrate has eased to €2000, despite that market being controlled by too few processors.

Soya has bounced this week, Argentine heat overcoming Brazil's mega crop, and a jump in exports. Beans, meal and oil all put on 5% or more, and palm oil joined in the fun, with buoyant exports, and an Indonesian edict for greater palm oil use in biodiesel limiting edible supply, and the cherry on the top is a La Niña is predicted to kick off in 2023 that could seriously reduce palm oil output.

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

16 March 2023: All pigs fed and ready for takeoff!

My prediction of spiralling prices now looks as likely as the Farmer’s pigs taking off. Complete stalemate in the market sees sweet whey rise a paltry €10 this week, and skim milk powder static. Palm and coconut fats remain resolutely dear, so no visible prospect of discounting raw materials or milk powder blends at the moment.

What is interesting is the price relationship between whey and skim in regards to protein content. If all whey went into the feed industry, 11% protein bought at €660 is a winner over 33% protein in skim at €2400 (the normal price:protein ratio being 1:3, currently 1:4), but as the food industry dictates whey values, upward price influence is unlikely to come from the feed industry, from formulation changes.

In other markets, soya is in gentle decline, Brazil’s extra 18% playing off Argentina’s probable 20% drought loss, in a global market where demand is muted. Palm oil is in the same place, as Indian imports in February were down 30%, faced off by a rise in Malaysian exports of 45%, but a strong ringitt and scant buying interest globally.

So, it looks that if anything’s a buy, it’s sweet whey, but hand-to-mouth seems most prudent.

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