Excuse the Milky Way analogy, but yet again, our esteemed trading community is putting on a stellar performance, pushing markets further into altitude sickness.

Sweet whey rose another staggering 5%, by €40, and skim by only 1%, up €30. The most interesting fact is that feed grade skim is just about the same price as edible grade, and traditionally, when that happens, it usually means the feed market is well over-inflated. Also, off-grades are more plentiful, which is more usual in a falling market. Plus, the French skim market is now significantly lower than the headline Dutch market (which has been inflated by bullish traders) and local supply is plentiful, so it looks like the rally is running out of steam.

Added to that, supermarket milk prices are finally decreasing, so there’s little chance of farm gate values rising for liquid milk, and sub 30p levels look to continue. On the other side of the argument, a sharp fall in US soya oil stocks has underpinned a hike in the soy complex, and taken its pal palm oil with it, to levels not seen in over a month. However, a sharp drop in palm oil imports to India has been ignored, and also the prospect of next year’s Brazilian soy crop being 4% larger than this year’s record makes soya look well overcooked at these levels.

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