That’s the only way to describe the milk powder market, as it is being driven by trader greed rather than fundamental factors.

Here are this week's indicators - skim milk powder up €160 (+4%, largest single weekly rise in decades), sweet whey up €30 (+2%) - whilst the soy complex sits pretty well unchanged, and palm oil only marginally higher. True, we are seeing chronic shortage of derivatives such as whey protein concentrate, fat-filled whey and hydrolysed wheat gluten, but there is no spot shortage of whey or skim, almost exclusively offered by traders and middle market operators. Interestingly, forward offers are being reined in, as even trader greed is now being tempered by financial worries, as the huge increase in raw material costs has dwarfed credit insurance ceilings. Won’t be long now before global recession crashes many a market, but will the global reset support food commodities over computer components and even energy?

An interesting fact - Wheat prices have risen 76% year on year. Poultry, the highest performing commodity in the ag food sector, has risen by 14% over the same period. Something’s got to give.

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