Friday, March 29, 2024

OMF NZ Futures Market Report – July 9, 2014

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Milk collections across the country for the month of June reached 9 million kg of milk solids, 10.1 per cent higher than June 2013. Inside the 9 million kgs, 7 million were collected in the North Island which was up 13% and 2 million kgs was collected in the South Island up 2%.
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In the Australian market, Fonterra’s milk collection numbers for the 2013-2014 season have reached the same level as recorded in the previous season.  Collections were down for the first half of the season, however finished strongly with the collection for Fonterra in Australia being up 16%, when compared with June 2013.

The futures market continues to look cheap.  In saying this, given the collapse in powder prices and the additional volume now offered over the next few months of GDT, it doesn’t surprise that we are seeing a lack of buying interest in the futures market.  We still maintain a view that WMP is a buy at these levels, with risk asymmetric and skewed to the upside.  This market will bounce as inventory levels clear on the ground in our export markets.

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