18 September 2019: the wages of skim far outweigh whey

Skim milk continues its inexorable rise, up €40 on feed grade and €30 on edible over the week. The first half of the old commodity traders' adage is ‘Buy in May and Go Away’, and it certainly held true this year, even if April was the bottom of the market (€250 below today, yes, €250!), but the second half ‘Don’t Come Back Til St Leger Day' (mid September) is off the mark this particular year, as it still looks like the long holders of the ageing ex-intervention stock and the middle market hangers-on will milk it yet higher.

However, there is a glimmer of light showing over the top of the hill, and that is at least one big dryer has switched from whey to skim, so given the enormous size of the long intervention stock purchases, and much less demand than supply on the skim balance sheet, and potential for far cheaper skim from the US, this flush could well be busted in Q4, possibly by November.

Given that the wages of skim (sorry!) far outweigh whey (sorry again!), and Christmas cheese production has already been in full swing, the expected slide in whey values hasn’t come about, and although we see the Netherlands down €10 this week, the market has only shed €20 in six weeks. Thus, I am less inclined to think a slide in whey is sustainable.

Currency remains buoyant, awaiting the Supreme Court decision on prorogation.

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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