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8 September 2022: A balanced market? I am starting to think not



Headline prices for both whey powder and skim milk are quoted as unchanged this week, after consistent rise through August. Associated markets have eased, with the soy complex drifting lower with meal as the weakest leg (down $20/t) and palm oil matching the mid July low, and stocks building like topsy, now over 2 million tonnes in Malaysia, ahead of peak production and poor export prospects.


The world view seems to be that global economic turmoil trumps northern hemisphere drought, or in other words, demand will reduce even more than supply. This seems rather facile, given that food demand is not as variable as demand for consumer goods, and China still has its buying boots on for soya imports this autumn.


What has definitely emerged this week are large scale offers of skim milk powder, so we could see some significant discounting in the near future, but my friends at Lacto Production see this as a delay of the autumn hike, and we will probably see the market march north by the end of September. However, I’m becoming doubtful about my previous conviction that milk powders will continue to spiral upwards, as the supporting markets in vegoils and proteins are looking overdone, so the whole edibles market should dictate the direction of travel of milk powders.


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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