Much as I'd like to think so, the underlying reduction in milk supply doesn't support the hypothesis.

Let's do the good news first, limited as it is. Both skim milk and sweet whey have finally posted lower numbers, only a humble €10 per tonne fall, but the first time we've seen red figures this year. This hasn't fed through into cheaper offers of physical product yet, and there's certainly no sign of a impending sell-off, but it does perhaps presage stability for the next few weeks, geopolitics notwithstanding. Palm oil has come off the boil, and whey protein concentrate has patchy availability, for a handsome price. Hydrolysed wheat gluten remains

It all boils down to liquid milk. Globally, both milk and cheese have been hiked 30% higher so far this year. Milk producers were reining back feed rations long before the Russia/Ukraine conflict, and even if feed and farm input prices crashed, the proverbial tap cannot be instantly turned back on, so this cycle seems unbreakable this side of next year's South American soya harvest. Forecasts for the UK reduction in milk supply range from a ridiculously hopeful -0.8% to a whopping -8.3%, and we've just seen another hot week in soya, with both beans and oil hitting the highs again, up 5-7% on the week. Early frosts in Argentina are pruning the soya crop forecasts, and despite an expected 4% swing from corn into soya planting in the US and Canada, even the November 2022 contract is still at decade-high levels.

So, the painful realignment of food with energy, housing and consumer goods continues, probably for another year at least, as the battle between inflation and interest rates plays out.

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