Readers of a certain vintage will remember the No.1 hit by marmite band Status Quo (I loved them!), but that where it looks like the milk powders market is heading.

Sweet whey shed another 2% this week (-€20 to €940), and skim milk a further €40 (-1.10%), as warehouses fill up and the whites of producers eyes start to show. Carrying on last week's commentary theme, relatively poor demand has overcome producers and middle market traders attempts to claim poor supply would hold prices up at untenable levels. This of course started in the spring, with the wilful withholding of material to wrench the market higher, but apparently warehouse stocks across Europe have become burdensome, so we are most likely looking at a slide of some magnitude.

I'm not sure where the economic barrier is before towers cease to dry skim milk powder, but sweet whey hits rock bottom at €750, so we're less than €200 from the theoretical bottom. The summer-long reduction in liquid milk supply certainly helped keep skim milk powder high for so long but this has stifled demand to the degree that it has brought the market to the brink of collapse.

A recovered pound has also brought some relief to last week's dire sterling prices, but the international markets are still nervous as the civil war in the Cabinet and the wider parliamentary party rages on.

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