30 June 2021: Down Down

It looks like the traders have won this round, and as much as the processors don’t like it, they are now offering quantities of both whey and skim at lower levels. Skim is down a whopping €60 in Holland, but only €15 in Germany, highlighting the patchy nature or regional pricing and physical supply. Whey has only shed €20 over the last week, but much greater quantities are being thrown at the market by processors who formerly swore they were out of stock…

Buying activity by end users has been pretty much zilch over the last week, and sellers are finally responding.

However, soya oil has now retraced half the losses seen in June, and as buyers have exited the market anticipating greater falls in milk powder, we could easily see a turnaround in mid July, with a firm veg oil market, buyers returning and traders hiking the market higher.

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

24 June 2021: Cheap trick?

Both skim and now finally sweet whey show reduced levels on the Dutch markets, but offers of physical material are still scarce. Whey is showing down €30 on the week, the first significant drop since last August, and skim milk posts €20 decrease to go with last week’s €40 drop, making a cumulative fall of circa 2.5%.

This market smacks of trader manipulation, as the sale of one truck cheaply in a quiet market pegs the price down at a new supposed level, with the speculator hoping to see a slide and maximise margin from their short selling at the price peak. There is certainly no wholesale quantity available at theses prices, yet. The UK situation on sweet whey has been skewed for the last two quarters, as the largest UK processor has allegedly been unable to export under the Brexit agreement rules, and has built stocks and heavily discounted prices through the period. However, this seems likely to have been resolved so we should see UK whey prices return to the Dutch axis for Western Europe.

It seems fair to predict a slow decline in real prices, but the rider has to be what happens to the soya complex, and as the last week may have seen soybeans stable and meal decline, soya oil has bounced again, and this bears much more on the milk powder markets.

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

18 June 2021: Cometh the trader ...

Despite last week’s gloomy outlook, things have got better, at least on paper. Sweet whey is quoted as unchanged in Holland, and skimmed milk powder is allegedly down €40 on the week, although quite where cheaper than unchanged physical offers are I do not know. The backdrop is of course the dive in the soy complex, but producers aren’t exactly flooding the market with physical supply of whey or skim milk. I suspect this may be traders trying to get some arbitrage and selling the market down, but they have got their fingers burnt before….

All depends on where proteins go from here, as the slide in soy looks like speculators short-selling the market, but out here in the real world of finding physical milk powders to make stuff with, there is no stampede by sellers and no falling knife to grab.

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