8 August 2024: Silly season (continued)

With no discernible justification, the headline Dutch markets are higher yet again this week, sweet whey by an astonishing 3% (up €20 to €670) and skim milk by a more muted half percent, up €10. 

Traders who are still at the office seem very bullish with their offers, over €800 for some presumably gold-plated material, but the plain fact is that there is more material available than processors currently require. If that requirement increases, the seers in the trading community will no doubt get their payout, but with China still out of the market for the foreseeable future, this autumn doesn’t look like the usual trajectory.

Chicago is still heading down on soya, with new crop sales at a 20 year low, and soy oil briefly went into the 30 cent range two days ago. So no support for milk powders from the soya or palm complex. 

Only other thing worthy of comment is the staggering loss of nigh on three eurocents by the pound because of the civil unrest, and also how slow the recovery is given the strong deterrent handed down by the judiciary. 

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

1 August 2024: Take your pick

Excuse the guitarist’s metaphor, but that’s the buyer’s dilemma in this most confusing of markets.

All pointers were downwards, until this week’s prices were released, to show over 1% increases in both sweet whey and skim, up €10 and €30 respectively. Whey we can write off as a correction, but skim milk needs further analysis. Looking at both arguments, here are the arguments proffered :

Bullish: 

• Traders are buying and storing (this is very recent news), when usually spending time in tax havens this time of year

• Tenders for auction in Sweden notably higher, buyers from France and Germany outbid

• Dutch traders exporting sweet whey to Central America

Bearish

• Liquid milk glut in China, authorities installing fresh milk tanks in feeding lots to reduce imports of CMR

• Liquid milk price drops to $0.15 per litre for fresh milk in China

• Whey markets in Italy and Spain remain €20 under Netherlands, usually premium 

• All CMR raw materials freely offered, wheat gluten shortage has now finished

Middle East tensions rising again have seen crude oil tick upwards, but veg oils have eased over the week. Palm oil still remains stubbornly about 5% higher than the May lows, but soy oil is now at 42 cents per pound, two thirds of the price when the contract went on the Board a year ago.

Taking the above into account, whilst it’s worrying that the trade is apparently buying and storing, I can’t see too much to support a rally, so expect to be recanting this hypothesis within a fortnight

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

25 July 2024: Quietude

Not quite the feeling when one has had one’s summer holiday before everyone else has had theirs, but more what is, or rather isn't, going on in the markets. 

In short it’s all unchanged, even though further easing was expected. Nothing beyond that worth reporting, as we are now in holiday central.

In background markets, crude oil has slipped back on hopes of a ceasefire in the Middle East, and taken soya and palm oil with it. Soya is interesting, as one admittedly large sale of half a million tonnes of beans has supported beans and meal, while soy oil has slipped back only about half the 14% hike seen at the beginning of July. Palm oil has likewise dipped but nothing to write home about. 

Sterling is enjoying a resurgence for buyers, but denting the export aspirations of milk powder sellers. 

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