I'm busy chomping millinery, after my denial of a price slide in last week's missal. But I honestly don't think I'll have to consume the whole sombrero, as milk powders are trading in stark contrast to the background markets of vegetable oils.

Here's the numbers; sweet whey down €60 (-4%), skim milk down €150 (-3.6%), but palm oil is back up to near early March highs of just under MYR70k and its poor relation soybean oil has charged up from 82 cents to 88 over the week, whilst beans remained static and meal dropped commensurately. Needless to say that offers of physical milk powders don't match the enormity of the published market prices, but something funny is going on, as the contra-indicators are significant.

The veg oil market was quite slow to explode after last Friday's announcement by the Indonesian Government that RBD palm olein was being withdrawn from export, in an attempt to cap domestic food inflation, but that is the foundation of this week's bull run in both palm and soya oil.

So taking that little lot into consideration, even conceding that the milk powder markets are well overdone, seeing nigh on 4% out of milk powders when veg oil has increased by 5% plus suggests possible market manipulation by traders. We all know how they hate a flat market.

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