Sir, So only 1% or 2% of dairy futures contracts are expected to result in physical delivery, with the balance settled by speculators ('Dairy futures market to begin trading in autumn', 24 July, p35)?

I suspect the dairy futures market will also prove popular with manufacturers and purchasers of milk powder. Europe's dairy industry is relatively new to the volatility we've seen in the past four years. Dairy futures are not a panacea, but they should give the industry a powerful tool for creating greater price certainty. Locking in a price months ahead of physical delivery will make it easier for the supply chain to plan its production intentions. So, even if dairy futures prove a bonanza for the City speculators, the contracts should still play a useful role for the rest of us.

Jim Begg, director general, Dairy UK