11 December 2019: Skim: Topping out or correction?

Skim milk powder has now officially plateaued, albeit for a single week. Whether the market has reached the sunlit uplands imagined by the two big intervention stock buyers over a year ago is difficult to call. There are two schools of thought as to where the market will go. If the middle market traders have sold their positions, as is suspected, we would see prices fall in a normal market. However, this is no normal market, as it is cornered by the intervention stock-holders, who could force it yet higher.

It would be a very dangerous strategy to short-sell skim with these conditions, but there is an equally compelling argument that milk processors could discount the market, forcing the licensed bandits to follow suit, but this phenomenon would likely be a much slower decline. About as easy to call as the general election.

Whey is unchanged in France, but posting another €10 increase in Holland. Supplies remain ample, so little chance of a sustained rise, especially with the bull run on skim running out of steam.

The Pound continues to reflect the Tory poll lead, which affirms the markets' understanding that 'Getting Brexit Done' equals remaining in the Customs Union in the reheated May deal, apart from throwing Arlene and the boys under the bus.

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