Whilst my long-promised peak in skim milk powder might finally look like it’s arrived, whey powder still seems fixated on climbing to the €1K mark, now it’s topped €900.
Getting skim out of the way first, it is finally unchanged this week at €2590, now €250 higher than this year’s low in March. But hang on a minute! The price for edible grade is €10 per tonne lower than feed grade! I can’t remember the last time this happened, which shows something is well overdone, and I don’t think it’s the edible skim market. Off grades are freely offered again and stocks have built, so what goes up …
Whey is a bit more problematical to call, as it’s still up 2% (+€20) in Holland, but more muted elsewhere. As whey protein concentrate production has been going gangbusters, traders claim this has starved the liquid whey market, so a lack of drying, but the flip side is that it has bi-produced a whole lot of whey permeate with few places to go except down, and will probably pull sweet whey with it. Coupled with that is a reduction in feed demand for whey as it has started to price itself out of formulation. However, our ever-hopeful trading community is steadfast in its opinion that they’ll get whey over the €1000 line, but what goes up too much …
Background markets are upside down. The prospect of a slightly smaller US soy crop, and a slightly smaller acreage in S America, plus China buying a few more soy cargoes because of geopolitical issues, has sent the soy complex unjustifiably northwards, especially soy oil, and palm oil with it, as the benchmark market for biofuels now sees crude oil down at $67 a barrel. Maybe it’s my seesaw theory; we’re all sitting on one end, waiting for the the markets for everything to crash, and we’re surprised to see the other end of the seesaw, the price, go up.
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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