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15 December 2023: PushMePullYou




 

The equal and opposing forces in milk powders are at it again. Sweet whey posted unchanged this week, and skim milk down €20, something less than 1%.

 

Taking whey first, the only EU state where supply exceeds demand is Italy, where the market is weaker, but not by enough to depress the Dutch headline market. Everywhere else, traders claim supply shortage, but the reality is that supply is meeting more muted demand. Maybe it’s just a Christmas thing, but neither a hike or a collapse look probable this side of the next month. Whey permeate is also rising in price, adding to the support side of the argument.

 

Skim milk is effectively in the same supply/demand boat, but with the more tangible proof that supply isn’t easing, as the premium for edible over feed grade is now wafer thin at a remarkable €10, when it is more usually three digits higher. Given the visible elements acting on both whey and skim, they could part company later in January, as whey stocks come out of the woodwork in a quiet new year market, whilst both grades of skim milk could head north on genuine supply shortage.

 

It’s still ‘jam tomorrow’ for actual rainfall in northern Brazil, and only the prospect of a truly mega crop when it does arrive is holding the Chicago soy complex broadly unchanged over the last week. 

 

You wouldn’t think that the BoE had left interest rates unchanged, looking at the £:€ this afternoon, but the dovish Fed comments has at least seen it sparkle against the dollar.



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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