4 March 2021: Swings and roundabouts

Sweet whey is up slightly, skim milk unchanged.

The slight easing in physical sweet whey supplies glimpsed last week has dematerialised, with traders squeezing the market again, and pushing it up €10. However, there is evidence that sweet whey is pricing itself out of formulations, losing ground to derivatives (lactose and permeate), so the longed-for easing in whey prices should start soon into Q2.

It’s the same story with skim milk, only it’s producers that have pulled up the drawbridge and trying to squeeze the market higher, as spot supplies are still hard to get into the yard.

The pound bounced initially on the Budget announcement, but has drifted back to unchanged later on. Now the Chancellor is talking in trillions, I heard a sobering comparison this evening - If one pound equals one second of time, a million seconds lasts about 11 days, but a billion (a thousand million) lasts 33 years, and a trillion (a thousand, thousand million) lasts 33,000 years.

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 February 2021: Unchanged. But unsupported?

The milk powder market is largely unchanged, but more significantly, unsupported.

The main reason for this is an about-turn in purchasing from SE Asia, perhaps the classic Chinese Breakdown, as the buying demand seen over the past quarter has vaporised, and red-faced traders are finally offering spot supplies of sweet whey. So, the market is unchanged, may even rise €10 or €20 over the coming weeks, but the underpinning seems to be disappearing, so we should see a falling market going into Q2.

It’s not the same story with skim milk, though, as that market is still fundamentally undersupplied, and has increased by €10 over the last week. It should ease with spring calvings boosting milk supply, and hopefully be helped down by falling whey prices, but that could be further into Q2.

Sterling has regained 30 month highs, topping €1.16 and $1.41, as the UK’s economic recovery from Covid is promised to be faster than other major economies.

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 February 2021: From frictionless trade to tradeless friction …

But no signs or easing, as supply is still poor on sweet whey and skim milk powder. The market is likely to remain rangebound in a narrow band for the next month, as supply remains tight but domestic demand remaining muted.

Sterling has increased again over the week, much to the chagrin of UK exporters, who have seen frictionless trade turn into tradeless friction.

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