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9 June 2022: Milk powder divergence

I don't buy into all this chartist nonsense, but we are definitely seeing a consolidation of the divergence between sweet whey and skim milk prices over the last week. Whey records a 2.5% drop (-€30), but skim posts a strong €60 hike, up 1.5%. Physical supply reflects this, with traders throwing whey at consumers, but playing much harder to get on skim milk, to the degree that all but €90 of the €230 drop witnessed in the last month is now eradicated.

The soya complex has had a quiet week, similarly palm oil, but one interesting fact is that sunflower oil prices have retreated from the highs in March of $2400 to $2000 (pre Ukraine conflict $1400), and the whole bull run in vegetable oils was built on sunflower oil shipping restrictions.

The divergence is unlikely to continue, given the reduction in liquid milk supply and higher farm gate prices being paid should support both markets, so I suspect we will see traders turn sweet whey sharply north the moment they get a whiff of import interest from China. The skim hike has brought buyers scurrying back into the market, so the uptrend in skim looks to continue for a couple of weeks yet. Traditionally, we see the post holiday period as the pinch point when prices rise into the autumn, but this is no ordinary year, so anything purchased now looks likely not to be an embarrassment by the time the order is fulfilled.

Sterling looks as bad as if the Queen had asked Paddington Bear to form a government.

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

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