Both milk powders down €30 this week, whey by 3.3% and skim by 1.2% as traders buy in their short positions and put the screw on processors, who have to their utter surprise found copious stocks that just weren’t visible a fortnight ago. Both commodities look set fair for further declines, but other processed powders are proving stubborn, as fat-filled whey is still at record price levels with little chance of a break and gluten is stuck at €2200 with rumours of shortage.
The other factor limiting blends declining is a surprise shortage of delactosed whey, which puts €10 on milk replacers.
Regarding my obsession with butter and the price frenzy, it appears production in August did fall back within seasonal trend line, so the skim milk stockpile isn’t growing exponentially.
The US soya harvest is going gangbusters, 15% ahead of the 5 year average, and planting conditions in Brazil have improved, which has brought beans below 10 cents for the first time since August, but strangely left meal and oil broadly unchanged, especially since the heat has come out of crude oil markets for the time being.
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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