4 September 2019: politics and the pound

Putting first things first, I’ll start with politics and the pound.

If one had returned from a wonderful holiday in Fantasyland, not seen a paper, telly or heard the radio, but just looked at the graph of sterling over the last days, nothing would stand out as surprising, which is pretty amazing considering the forces at work in the market.

One can only surmise the clever money correctly predicted the weasels that have taken over Toad Hall would get their furry bottoms well and truly kicked, leaving the pound precisely where it started this tumultuous week. Any sign that the ship of fools is heading back to Fantasyland, for that is where the Magic Money Tree is to be found, and sterling will be off like a rat down a drainpipe.

To duller matters, no change in French prices this week, Dutch whey is down €10, skim milk up €10 (edible grade up €40), so the same prediction applies, forward whey will drift down, skim will continue its rise and sterling will react to the will of the people, and those who manipulate it to their own ends.

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

28 August 2019: A possible joker in the pack

It seems buyers are still on their summer holidays, as traded volume is light, with none of the expected downward pressure on whey prices witnessed, but higher skim prices being demanded by the intervention stock long-holders.

The global balance sheet for whey is tilted towards falling values, with a bulge in the USA, broadly balanced in Europe and dire demand coming from the Far East. However, the spot local market is currently carrying forward unchanged in the absence of US dumping having started, so there will probably be a time lag before prices head southwards.

Skim is another matter. I understand 75% of the enormous ex-intervention stock is held by three traders, and the remaining quantity that has been sold to the middle market is showing pretty much zero margin, so unlikely to be offered until there’s another spike in the market. Therefore I can’t see it breaking this side of January, if even then. The possible joker in the pack is US skim, which could explode the nice little earner the intervention buyers spotted a year ago.

Currency is a battle between the prorogues and the rainbow alliance, with the tug of war holding the pound stable at the €1.10 mark. But quite what happens if the no-confidence vote wins, or the snap election is called anyway is anyone’s guess.

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 August 2019: The fundamental weakness in whey and strength in skim remain

No material change this week, with whey and skim both unchanged (but feed grade skim notching up €10 in the Netherlands), but the fundamental weakness in whey and fundamental strength in skim remain.

Sterling is looking decidedly brighter, despite our optimistic prime minister trailing round the capitals of Europe demanding a kinder divorce. Perhaps he might try selling our island to his friend in the White House, to make up for the disappointment over Greenland?

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