26 August 2020: I was right! Eventually

Although I’m well known in yachting circles for running aground, my milk powder depth-sounder sensed the bottom last week, and with the return of autumn weather comes the buying interest, and up the market seems to be going. It’s not all seaweed-reading, the facts are that as the dollar has taken a pasting, and domestic milk powders are relatively cheap, US traders have stolen some big orders to Algeria and other markets that traditionally source from the EU. Couple this with low liquid milk production in Europe and the middle market forcing some arbitrage, and both whey and particularly skim look ripe for a bull run, possibly in excess of €100/tonne.

It has started slowly, whey is only up €10, and although edible skim milk is unchanged, feed grade has jumped €20. What is significant is that these rises represent the return of volume purchases, and as calf milk replacer orders for autumn calving come in, traders sense blood. As this peculiar year has seen feast and famine, then feast, and the cheap parcels of off-grade powders have disappeared, order times going into September could roll out to three or four weeks.

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 August 2020: Silly Season 2

Traders have contrived to make me look an even bigger idiot and dropped the market a further €10 for whey powder and €20 for skim milk. I plead mitigation of a very thin holiday market, with virtually no activity, but more sellers than buyers.

What is confusing is that producers have capacity to store, and in a ’normal’ year with reduced milk production through the summer and the prospect of an autumn hike, producers usually pull up the drawbridge and empty everything into the silo, thus forcing the hike.

But I stress again that this is a market based on a handful of small spot trades, and if the middle market is short selling Q4, it is a very dangerous game.

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

13 August 2020: Silly Season

Welcome to silly season, August in post-COVID France, a market devoid of both buyers and sellers, and prices are down on the evidence of a handful of trucks of milk powder sold under a non existent market!

OK, so everyone’s on holiday or doing their filing, but the published numbers show whey down €20 on the week, and skim milk powder down €30 on feed grade and a whopping €50 on edible grade. There is also a turf war going on in several European countries, so the UK is not alone in having cheap job lots of milk powder distorting the volume market, apparently Spain and Romania are also similarly effected. I remain convinced the market will bounce, possibly before the end of this month, if for no other fundamental reason than liquid milk supply is in deficit, so when the job lots of off grade material have disappeared, the only way is up.

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