The GDT Price Index was up just 0.3% overnight.
Milkfats are on their way up again. The Butter Price Index jumped 3.8% while the Anhydrous Milkfat (AMF) Price Index lifted 3.6%.
Butter prices have been expected to lift for quite some time, as the European butter price has leapt up over the past couple of months now due to lack of supply in that region. The average US$5954/t that was achieved for butter at GDT overnight is still some US$2000/t behind the European price, however. Ahead of the event, the NZX Dairy Derivatives market expected the price for unsalted butter to ship in November to lift 2.6%. This grade and contract of product soared 6.8%. Butter that was sold for next month shipping did lose value (Contract 1 was down 9.2%) – and is now more closely aligned with the other contracts after spiking at the previous event.
AMF prices saw a smaller gain than that expected by the Derivatives market. Regular grade AMF to ship in November was expected to lift 2.9%, and actually increased 1.7%. However, unlike butter, Contract 1 prices jumped 7.8% to just over US$7000/t – showing some buyers do need fat now.
The Whole Milk Powder (WMP) Price Index eased 1.6% at the September 5 event. Ahead of the event the Derivatives market was expecting a 3.4% jump in the price of regular grade WMP to ship in November. This grade and contract of product eased 0.6%. Prices for regular grade WMP were between US$3000/t and US$3100/t across all contract periods. There was a little less WMP bought at this event, though there were a few more winning bidders from North Asia (which includes China). WMP offer volumes are set to increase over the next few events, so buyers are unlikely to feel an urgent need to buy product now.
The Skim Milk Powder (SMP) Price Index fell 1.2%. The Derivatives market anticipated a 1.6% lift in the price of medium heat SMP to ship in November ahead of the event. This grade and contract of product did lift slightly – up 0.3% or $5/t. Prices for SMP to ship in October and December also lifted, but were overshadowed by falls in prices for product to ship in early 2018. The overall fall in SMP prices is not a surprise. The dairy commodity market remains focused on the volume of SMP that is in public storage in Europe. Product has started to flow back into the intervention scheme before it closes at the end of the month. Over the last two weeks, 2060t has been entered – including SMP from France for the first time this year.
Butter milk powder also lost value, with this price index dropping 10.1%. Cheddar prices lifted 2.5%, rennet casein was up 1.2% and lactose jumped 5.1%.
The number of winning bidders was the same as the previous event at 140, though more product was sold. A total of 33,501t of product was sold at this event, up 4%.
