To be honest, I thought I was losing the plot, as all the factors pointed to whey becoming short and rising, but down it continued to fall, at least on paper. However, the fundamentals have been recognised, and whey has bounced €30 this week.

Skim milk powder, on the other hand, has finally stabilised, again, on paper. The dryers are going flat out to meet demand, but the processors are holding on to their stocks and not dumping them into the void between the published market prices and the processors’ expectations. Having said that, physical supply can’t defy gravity for long, so unless there is another spoke in the wheel, skim does look likely to drop a hundred euro or so over the next weeks, however slowly.

However, the current supply situation is a conundrum, as although whey is rising because of shortage, it is more freely available than skim milk, so the spot pricing of milk replacers stays unjustifiably high. And Lacto Production are still on a rolling five-week notice for delivery, so again the mantra remains that bookings are more valuable than market sentiment.

I haven’t postulated on sterling for a while, since it collapsed to €1.05 momentarily, following the initial UK economic response to COVID-19, but we’re now back to the bottom of the post-Brexit range, a smidgeon below €1.15. No doubt the upcoming talks will produce more losses than gains.

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