Finally, we see the skim market break, whilst whey is held unchanged by its fundamentals.
Skim milk has slumped 2.7% this week, and no surprise, as the butter market is flying and the skim byproduct is piling up, as predicted. In parts of Europe, butter has hit a recent high of €8K as producers scramble to get enough milk, as their Christmas has come early. EU production figures aren’t out yet for August or September, but there was an unseasonable spike in July which it is reasonable to expect to have extended into the third quarter.
And you can see why, looking at the price of butter going through the roof, no wonder there’s more skim being thrown at the market than even the strong autumn calving market can soak up.
Whey on the other hand is more muted in its fundamentals. Demand for whey powder remains strong from the global feed sector, but supply remains equally brisk, with record production of European hard cheeses and stable prices keeping the market in balance
Other markets are stable to higher, Hurricane Hélène didn’t do much for those expecting lower markets, with meal up $30 over the week, but soy oil remained pretty much stable. Brazil is a couple of percent behind last year’s record planting pace, but has ample time to catch up. The odd one out is palm oil, which chose to follow crude oil up 5% on geopolitical pressures (I bought my domestic fuel oil for the winter today, a sure sign that the market will fall out of bed)
Sterling had a weak day after the BoE boss suggested easing interest rates rather more vigorously than expected, but single handed out of intensive care at the time of writing.
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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