27 March 2019

This week we have the twin delights of a falling market and a rising Pound.

Not that you’d know it, but skim milk powder is coming under the predicted pressure. Prices aren’t really showing it yet, but then the traders are long and wrong band won’t slash and burn on prices yet. Perhaps we need the pressure of spring milk to start to really turn the screw.

Sweet whey is a bit of a conundrum, to be honest, because as burdensome as the skim stocks may be, whey is not that freely available. And yet we see prices down in the Netherlands by a whopping €20 this week, although France hasn’t followed fully, only down a tenner. This seems a bit strange to me, as we saw prices canter up €50 during the first three weeks of the new year, but the slide has been €80-90 since, on the back of scant reason. I’m not surprised whey stocks are short, given it’s more profitable for the towers to dry milk. Which all makes the recent slide unsustainable, in my view, anyway. If skim falls heavily, all bets are off, but until it does, there can’t be more pressure on whey, surely?

It’s good to see a bit of backbone back in sterling, now even the mighty ERG are colouring in pink bits of paper instead of wandering through lobbies. It may all change for the better, or worse, but as I write, giving whipped MPs eight choices when they can’t agree on one sounds like unlikely to deliver a breakthrough. But my remit is second-guessing currency, and I suspect we’ve seen the most of the rise anticipating a customs union outcome, but if that doesn’t happen, most of the seven cent increase will likely be given back.

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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