The overall GDT index increased 0.2% to an average sale prices of US$3387 a tonne.
Whole milk powder was up 0;.3% to US$3114, butter was up 3.4% to US$6004 and cheddar was up 1.6% to US$4112. Rennet casein gained 2.4$ to US$6358.
Skim milk powder prices lost 3.2% to US$2024. Anhydrous milk fat was down 0.2% to US$6577 and lactose fell 1.8% to US$825.
Strong consumer demand for natural, full fat products such as butter is here to stay, AgriHQ analyst Susan Kilsby said after the auction.
“This strong demand along with limited supply is keeping buyers of dairy commodities paying high prices though they aren’t necessarily happy about paying so much for it.
“Fonterra is set to offer less butter on GDT this year due to strong demand from other sales channels. Its forecast for butter offer volumes over the next 12 months is 15% behind what it offered last year.”
Ahead of the auction, the July WMP futures contract trading on the NZX Dairy Derivatives market settled at US$3130/t, indicating a 1% lift in the price of regular grade WMP to ship in September.
That grade and contract lifted 0.2%. WMP prices were expected to stick close to current levels for most of the season.
But cheddar prices were expected to come under pressure as more became available from both Europe and the United States. Prices for cheddar to ship in September did drop 9.6% on average, indicating buyers had their short-term needs covered.
Anhydrous milk fat was dragged down by prices for product shipping in November and December. The derivatives market had expected a lift of 2.3% in the price of regular grade AMF to ship in September. That grade and contract lifted 3%.
The volume of SMP in storage, including that in intervention in Europe, continued to put pressure on the market. European quotation prices for SMP had been slipping, with the latest price slightly below the price at which the European Commission sold intervention SMP for at its last tender round in June.
It was expected that product would start to enter into the government-run intervention scheme again. Nothing had been entered into intervention since late May but the scheme remained open until September.
There were 115 winning bidders with 26,688t of product sold.
