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16 February 2024: The slow decline continues




Sweet whey unchanged, skim milk surprisingly €30 higher (+1.25%). But that is the reverse of the real markets, as the sentiment incontrovertibly lower.

 

The most macro factor of all is China’s continued absence, as they slowly chew through expensive 2022 purchases in a decimated pig herd and gloomy domestic economy. Looking back, prices peaked at a whopping €1450 in April 2022, plunging to a low of €540 sixteen months later, now sitting at an arguably more commercially viable €730 from the processors’ point of view. Cracks are starting to show in the wall of armour erected to avoid sliding back into negative margins, as WPC has shed €80, as the normally united brotherhood of producers breaks ranks in the face of stocks building, and more freely available delactosed whey is also €100 lower. 

 

Skim milk rising is counterintuitive, as off-grade material is now offered more freely, the bellwether for definite oversupply, and a key indicator I like to keep an eye on is skim milk production, which however far below the five year average this may be, production did finally tick higher in November, the most recent available statistics.

 



Nothing much else going on globally. One has to ask how soya meal can only have lost 25% since the crazy highs of November, given the Brazilian crop has just been increased by a casual million and half tonnes, and likewise soya oil, but that has been suspended by biofuel mandates in a stubbornly high crude oil market.


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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