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8 June 2023: Newton's Third Law ...


… concerns equal and opposite forces, but our milk powder markets remain in balance despite the force for increase being the greater. Allegedly.


The situation is this, sweet whey and skim milk both posted unchanged levels this week, but processors are still saying ‘how much do you want?’ and traders broadly saying ‘buy now and avoid the rush’. For sweet whey certainly, there is no commercial downward pressure, as it is so far below cost of production, but skim milk could theoretically ease. Quite when the warehouses will empty is the question, as demand is definitely eating into the stockpiles, but however desperate both processors and traders are, both markets have bottommed out for a couple of months now.


Wheat gluten has eased significantly recently, another victim of a controlled market of too few producers pegging prices at an artificially high level, and then playing catchup by offering bursting warehouse inventories more cheaply.


In other markets, OPEC trumpeting cutbacks in crude oil production has lifted soy oil by 10% in the last week, 46 cents rising to 51 cents, but palm oil has followed its own fundamentals for once, as India has been cancelling edible palm contracts in favour of cheaper soy and sunflower oil.


Sterling seems to be hanging on to its gains against the euro, on the strength of interest rate pressures either side of the Channel.


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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