What a week, and an embarrassing one for this observer's prediction of the market levelling out; skim milk down 1.5%, but sweet whey down a whopping 7%. The sweet whey market graph is most interesting as it shows the steepest dive in recent memory, and is set to undercut the 2021 trend line.

The very bottom line on sweet whey is currently €500, the cost of drying, but with zero margin and reliant on dear cheese prices, so unlikely to happen. Skim milk is of course much more muted in its decrease, as liquid milk supply remains in deficit, and processors and middle market operators are adamant it cannot fall much further in the current cycle.

Looking at background markets, vegetable oils have led the slide, soya oil down to 57 cents from highs of 80 cents in April, and palm oil absolutely plummeting, down to 3,700MYR from the peak of 7,000MYR, so yes, nearly a full 50% slide in value. One remarkable fact is that the Indonesian Government is legislating for 30% of palm oil to be included in biodiesel buy the end of July, so desperate are they to cancel out the stockpiling that was caused by the ill-judged export ban in April.

The global supply/demand cycle that constricted supply so violently is now playing out with equal strength on the demand side.

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