Well, I think it is - the decline in the milk powders market, that is.

Both sweet whey and skim milk are posting unchanged levels this week, in thin market activity usually associated with early August. The main rider to my conviction that we are seeing the bottom of the market for the next quarter at least is that both sweet whey and especially skim are now being thrown at blenders, so spot supply is plentiful, something we have not seen since processors starved the market so much higher. The core of my argument is the surge in buying activity Europe-wide, triggered by the post-holiday rush back to work.

Background markets are taking a breather; the soya complex has drifted lower on continued bullish weather during the pod development season, but bearish export news, with Chinese soybean imports down some 23% YOY. The Indonesian Government has cracked the whip on palm oil exports, increasing the export quota to nine times domestic sales, up from seven, largely in response to a paltry 1% increase in exports during July, whilst stocks build faster. Grains are caught between drought fears and the easing of grain and fertiliser exports from the Black Sea.

Prices remain unchanged this week, and interest is growing in securing orders going into September, and thus the value of bookings may become greater than a rock-bottom price

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