12 May 2022: What goes up ...

It was a good job that it was a soft commodity that hit Sir Isaac Newton on the head, otherwise we may never have learnt this truism. And gravity certainly has acted on milk powder markets over the past week, with both whey and skim milk both shedding nigh on 3% of value. Backgrounds markets have been quiet, and profit-taking has pulled palm oil down, despite Malaysia having to take up the slack in exports caused by the Indonesian ban.

Whilst the adage that there are more sellers than buyers is currently true, spot demand has returned, and the selling stampede is headed by the greediest of the traders desperate to unload downgrade material that they hung on to for too long. The supply/demand crisis on fat filled whey and hydrolysed wheat gluten has receded slightly because of marginally improved supply met by muted demand, but with no easing in price.

Where we go from here is complicated to predict, since global warming and geopolitics have returned foodstuffs from being lowly also-rans in the commodity world to the backbone of the global economy, so it is facile to link the current slide to the slump in global share indexes etc. The grain/oilseed export facilities in Odessa having been recently destroyed has limited downward potential in grain markets, and we’re not out of the woods yet for northern hemisphere spring rainfall, so this slide may not sustain from a correction into the hoped-for buyers’ revenge.

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


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