24 June 2021: Cheap trick?

Both skim and now finally sweet whey show reduced levels on the Dutch markets, but offers of physical material are still scarce. Whey is showing down €30 on the week, the first significant drop since last August, and skim milk posts €20 decrease to go with last week’s €40 drop, making a cumulative fall of circa 2.5%.

This market smacks of trader manipulation, as the sale of one truck cheaply in a quiet market pegs the price down at a new supposed level, with the speculator hoping to see a slide and maximise margin from their short selling at the price peak. There is certainly no wholesale quantity available at theses prices, yet. The UK situation on sweet whey has been skewed for the last two quarters, as the largest UK processor has allegedly been unable to export under the Brexit agreement rules, and has built stocks and heavily discounted prices through the period. However, this seems likely to have been resolved so we should see UK whey prices return to the Dutch axis for Western Europe.

It seems fair to predict a slow decline in real prices, but the rider has to be what happens to the soya complex, and as the last week may have seen soybeans stable and meal decline, soya oil has bounced again, and this bears much more on the milk powder markets.

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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