12 September 2019: My prediction of easing values later in Q4 still holds

It is tempting to say one couldn’t write this stuff, but I have to, so here goes. The game of Cowboys and Indians in Westminster continues, with even the Sheriff handing in his badge, but I will confine my comments to the effects on sterling.

Currency has remained surprisingly stable, even buoyant on each government defeat (I can’t believe I’m writing this, it’s bonkers to see the money markets reacting to a Conservative administration the way they used to react to the loony left Labour brigade!), so even if the Supreme Court chuck out the Scottish judges' ruling the prorogation illegal, and the politicos are twiddling their thumbs until 15th October, the markets will likely only react to deal/no deal news or rumours, despite the deepening gloom of potential recession in Europe.

Whey is still flatlining, but my prediction of easing values later in Q4 still holds. This week saw news of 50k sows slaughtered in the Philippines, so the ASF crisis is still building.

However, skim is sharply up this week, with buyers throwing in the towel and jubilant sellers saying ’told you so!’ The edible market in Holland is up €70 in two weeks and feed grade SMP up €60 over the same period. Lacto Production have tried to limit the pain, but prices are up.

Talk with the milk powder companies at SPACE in Rennes on Tuesday and Dairy Day in Telford yesterday was dominated by expectations of a continuing bull run in skim, and consequently few shared my bearish view on forward whey.

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

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