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24 November 2022: The revaluation of food


Last week’s jaunt to Eurotier took me out of the market for a week, but talking around milk powder suppliers, very mixed views emerged on where skim and whey are heading. The consensus, if there was one, was that sweet whey has hit the bottom, but probably still more slack in skim milk.


Sweet whey has flatlined at €890 for six weeks straight, despite predictions that it would slide further from the highs of €1500 seen in April. Heavy supply from cheese production has been balanced by increasing demand from China, as the pig industry recovery is now well established and dollar strength has favoured European supply.


Skim milk has shed €50 a week for the last fortnight, now down to €2800, and it’s same old/same old, withheld stocks still sitting in warehouse with muted forward demand and just hand to mouth buying. The graph shows that skim milk is now at pretty much the average price for three years, but what is interesting is the juxtaposition of the smooth increase and the much sharper decrease, which is unusual and undoubtedly proof of the upwardly engineered market.


The soy complex has lacked direction, as S E Asian demand is slack, but concerns persist about a triple dip La Niña weather pattern denting Argentinian sowing intentions. Palm oil has remained around the MYR4000 mark as oilseeds generally hold their value, and coconut oil remains expensive.


It seems that edible commodities are dissociating from the pool of traded things, and the fundamentals of supply and demand are refocussing on the absolute fundamental that however high the lithium futures price gets, food is far higher up Maslow’s Hierarchy of Needs than flat screen TVs or iPhone 14.





The soy complex has lacked direction, as S E Asian demand is slack, but concerns persist about a triple dip La Niña weather pattern denting Argentinian sowing intentions. Palm oil has remained around the MYR4000 mark as oilseeds generally hold their value, and coconut oil remains expensive.


It seems that edible commodities are dissociating from the pool of traded things, and the fundamentals of supply and demand are refocussing on the absolute fundamental that however high the lithium futures price gets, food is far higher up Maslow’s Hierarchy of Needs than flat screen TVs or iPhone 14.

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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