The September issue of the report said international buyers are looking for short-term cover, given that prices appear to have reached a floor.
The recent shift in market sentiment is being influenced by expectations of a reduction in NZ milk volumes this season, due to a change in farming strategies and concern over an El Nino impact. Rabobank is expecting a fall of anywhere between 8-10% in milk volumes for the season.
Latest data from DCANZ showed the August intake of milk from NZ milk companies was down 0.73% on a kilograms of milksolids basis. Fonterra's August milk intake is down by 2.5%.
In Europe, seasonal milk supply is still strong. Rabobank said "The supply taps are yet to be turned off, with production edging up 2.5% for July 2015".
