Still the milk powder market climbs, but no one seems to have told it that the proteins markets has (hopefully) topped out.

As the whole soya complex has dipped, led mainly by soya meal being down $50 on old crop futures contracts, palm and coconut oil have carried on up on their own sweet way (sorry!) and milk powders with them. Whey posts another €10 higher and skim milk powder €20, but we’re back to the phoney famine again, with processors and particularly traders keen to supply any amount at the higher levels. But, the greed of the huge hike in milk powder prices has now seemingly run its course and demand is now scaling back significantly, which should undermine the bull market and cause a slide in the near future IF the soya complex does the same.

New crop soybeans (November contract) are $2 a bushel (call it 15%) cheaper than old crop, so favourable weather in the Midwest should pressure the whole complex lower, but not as quickly as to influence the milk powder markets externally. The buyers’ revolt that has started is more likely to pull the market lower. Farmers are switching increasingly to milk for calves (who’d have thought it?) and feed formulators are finding cheaper protein than whey powder so the supply:demand balance has palpably tipped.

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