Another predictable week for milk powders; sweet whey posting unchanged for the third week running, whilst skim milk shed its largest percentage in the current cycle, down nearly 5% on last week, or -€150.

Taking the easier one first, skim milk has now fallen from €3600 to €2900 in five weeks, so call it 20% lower. The highs were engineered by withholding product, so processors and traders alike can repent at leisure as stocks still far surpass demand, so it seems fair to assume further discounting will happen. Interestingly though, the German market is called unchanged on the week, so perhaps some sign of the handbrake being applied in the wider market.

Whey is harder to call, as it has shown much more resilience than skim, but the fundamentals are as weak, in that we are currently seeing maximum production for cheese, and the biproduct has to go somewhere, so prices could theoretically fall below cost of production (currently circa €750). Liquid whey demand for pigfeed is also limited due to environmental constraints, so the reluctance of the headline Dutch market to fall could be a smokescreen.

In other markets, soybeans went up, meal stayed flat and oil dipped a bit, which is an unusual balance of the soy complex. Palm oil drifted a few percent on the resumption of Black Sea sunflower oil export, but is supported by monsoon storms hampering peak harvesting.

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