11 January 2019

The milk powder market is about as organised as British politics at the moment.

Taking skim milk powder first, 80,000 tonnes have been sold out of intervention during the last week, at prices between €1554 and €1676 per tonne, taking the total sold in the last three months to near 200,000 tonnes, and leaving only 22,200 tonnes left in EU stores.

Whilst EU accountants are grateful for the extra bunce over the €1300 minimum sale price, the huge question remains, where is the demand for this extra tonnage, and how long can the market defy gravity and collapse?

Whey powder has ticked up another €10 and nothing else in the milk powder blender’s arsenal of raw materials gets any cheaper, so the hand-to-mouth buying this market backdrop generally dictates could well sustain the continued rise for some weeks yet …

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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

3 January 2019

Happy New Year.

Sweet whey ticked up €10 in the Netherlands, but remains unchanged in France, whilst traders struggle to get out of bed after the Christmas break. Cheese production remains buoyant, so supplies remain in balance with demand. Whilst skim milk continues to defy gravity, sweet whey is feeling little impetus to compete, so is likely to hold on to December’s modest gains until later in the month, possibly even later in the quarter.

Skim milk powder continues its upward march, almost pointing to a possible cartel, given the tonnage available and traders unwillingness to offer. The game can presumably go on a little while yet, but surely this makes the collapse all the more precipitous, when it comes? The old adage that the tops and bottoms of markets were made for fools isn’t much help in identifying those chart points, but as every buyer remains hand-to-mouth, spot demand is the only interest, and wave the traders are surfing just gets higher. All waves break, but how far is this one from the beach?

There have been notable problems with transport within and out of France in the last month, exacerbated by les gilets jaune, but hampered by strikes at some French ports and wild weather in the Channel and even though all three issues have receded, transport firms are still trying to play catch-up.

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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

21 December 2018

This week has seen an unfestive hike in the milk powder markets.

Rising inexplicably, truth be told. The €20 hike on whey, I suspect, is currency related, whilst the ravages of the Westminster pantomime continue to weigh on sterling. The fundamentals remain the same, reasonable stocks in a well sold Q1 market. Prices may ease later in January, but probably only sightly, against the backdrop of the shenanigans in the skim milk market.

Re which, skim milk powder is a very different beast. How can a government fire sale of 30% of intervention stock in one week result in a €100 price hike by the middle market?? This reeks of massive trader interference, stimulating a false hike to stimulate panic buying and short selling, to buy in and square their books on the resultant slide.

That’s my reading of it, but when the intervention selling price is the wrong side of €300 per tonne of the current market price, how is that sustainable, when there’s still 130,000 tonnes of unsold intervention stock, even allowing for the fall in milk production caused by the lack in fodder.

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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