28 August 2019: A possible joker in the pack

It seems buyers are still on their summer holidays, as traded volume is light, with none of the expected downward pressure on whey prices witnessed, but higher skim prices being demanded by the intervention stock long-holders.

The global balance sheet for whey is tilted towards falling values, with a bulge in the USA, broadly balanced in Europe and dire demand coming from the Far East. However, the spot local market is currently carrying forward unchanged in the absence of US dumping having started, so there will probably be a time lag before prices head southwards.

Skim is another matter. I understand 75% of the enormous ex-intervention stock is held by three traders, and the remaining quantity that has been sold to the middle market is showing pretty much zero margin, so unlikely to be offered until there’s another spike in the market. Therefore I can’t see it breaking this side of January, if even then. The possible joker in the pack is US skim, which could explode the nice little earner the intervention buyers spotted a year ago.

Currency is a battle between the prorogues and the rainbow alliance, with the tug of war holding the pound stable at the €1.10 mark. But quite what happens if the no-confidence vote wins, or the snap election is called anyway is anyone’s guess.

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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