Not quite, but it is getting harder to find discounted material, despite the Dutch market falling back by €10 (-1.2%) this week (by the way, No Whey José is apparently vegan chocolate, so not a community that is competing for whey supply). Demand has been heavy, particularly from Asia, so despite the halt in the decrease, then the halt in the increase, whey does look well supported at current levels.

Skim milk powder is posted unchanged, but not seeing material being withheld to the same degree. However, the graph below is a bit surprising, and may support a genuine supply:demand dynamic pushing skim higher in the new year.

Production has plunged to its lowest level for three years, and by a large margin. Feed grade is only €35 discount to edible grade, more usually €100 plus, which usually indicates a reduction in supply (i.e. reduced production = less downgrading), so a reasonable hypothesis is for markets to trend higher.

WPC is trending higher, but still €400 lower than skim milk, an unusually large discount for a market controlled by very few producers, so another danger area for blend price increase.

Nothing much going on in background markets, US soya harvest is slightly ahead of the five year average, light and then heavier rain predicted for parched areas in northern Brazil, and palm oil is following soy oil’s sideways movement, despite predictions of slowing production.

Finally, the pound is recovering thanks to inflation falling faster in the Eurozone and the US, underpinning UK interest rates remaining the more attractive into 2024.

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