Sweet whey flatlined again this week, but skim milk surprised with a €30 hike. Looking at skim, I must admit to having had my eye off the ball for the Dutch production figures, that were giving cause for concern as they plunged during early autumn last year. Because the December line doesn’t feature on the graph, the huge jump from 4,700 tonnes to 7,300 tonnes for the month was a real game-changer, and might explain why the skim market fell €200 since the beginning of the year. 

The biggest influence in background markets is undoubtedly crude oil, with the benchmark US indicator now down to $78, from its Israel/Iran peak of $90. Whilst US soybean futures have remained pretty much unchanged, hanging on to a minor story about striking stevedores in Argentina in the face of Brazil stealing the lion’s share of the Chinese market, soy oil has dipped another 6% plus this week, most of that in the last two sessions. Thus the spillover into biofuel mandates forcing vegoils south. 

The palm oil market is still being selective in which metrics it is subscribing to, ignoring a seismic reduction in Indian imports, as cheaper sunflower oil continues to dominate 

News from the sales side of milk powders/blends is that demand is brisk, far more than in Q1, so whilst a lot of milk is being processed, stocks wouldn’t appear to be building enough to force either whey or skim downwards, so we may see equilibrium for a month yet. Unless, of course, ‘events’ prove otherwise. 

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