Greg's Milk Monitor 25 October 2024: Damp Squib?

Well, skimmed milk down €20 (-0.8%) and sweet whey unchanged certainly doesn’t have the whiff of a collapsing market. There is still a battle royal going on between the Dutch and German markets, as the traditional price premium of €30 for Germany was eroded back to parity by June, to plummet to a whopping €110 by the end of August, as the Dutch traders sent their market sharply higher. That discount is still €65, but there are signs that the Dutch market will fall back into line, as there are ample offers under the market, and downgrades are coming out of the woodwork. But, ’tis what ’tis, so we have to work with an official unchanged market, and the graph shows how relatively flat the market has been these last two years.

Skim milk tells much the same story, the traditional German discount under the Dutch market has opened out to €100 from the usual €50, stocks are popping up everywhere and downgrades a plenty. 

 So not a sign that either market will rise imminently, pressure has to remain downwards, but the market is taking its time to address the oversupply.

It’s a similar story in global soya markets, which still haven’t woken up to the fact that the largest soya crop in US history is 15% ahead of the five year harvesting average, to the degree that farmers will run out of storage and good old fashioned ‘harvest pressure’ should come in to play. Soy oil really does take the biscuit, up 12% since the mid September sub 40 cent lows, on the strength of larger biodiesel usage, and palm oil is off the scale, up more than 25% since the August lows on confirmation that B40 becomes statutory in Indonesia come January 1st 2025, followed by B50 a year later.

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