Now the Christmas and New Year holidays are out of the way, the milk powder markets are both unchanged.

Skim milk is freely offered at unchanged levels, but by the middle market rather than the intervention long stock holders, but it is difficult to believe the whole 170,00 tonnes has been squirrelled away. However, there were big sales to Ageria and Cuba in Q4 2019, and also big orders from Africa, which took large quantities of the oldest ex-intervention stock that wouldn't sell in Europe. Plus skim production in Australia was massively reduced because of the drought there. However, as the African market is already bought, a lack of Q1 demand could see prices fall. It feels potentially weak, but the margin these traders are sitting on is probably limited, so a wholesale slide seems unlikely.

Whey is in balance, producers aren't overdone with stock, and are releasing it slowly, but demand isn't sparkling either, so the whey market is likely to drift sideways until new factors emerge.

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