Thursday, March 28, 2024

Big bounce for GDT

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Butter and milk powder prices lifted significantly to boost the Global Dairy Trade index 4.9% at last night’s auction.
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Whole milk powder was up 5.1% with skim milk powder increasing 6.5% and butter up 8.8% on dry conditions in New Zealand and Fonterra’s reduced offering on the platform.

Fonterra yesterday said it December milk collection was down 6% and it expected the total this season to be 3% down on last season.

Buyers were starting to take note of weaker milk production from NZ, AgiriHQ dairy analyst Susan Kilsby said.

The GDT price index bounce was the biggest since November 2016.

“Buyers have not been paying much attention to NZ’s dry conditions to date as the effects of poor pasture production had not yet flowed through to milk production statistics,” she said.

“But this appears to have turned around at this week’s GDT event.

Fonterra had reduced its offer volumes for the auction.

WMP volumes were down 3.1% from forecasts, SMP down 4.9% and butter 2.6%.

The average WMP price edged just over US$3000/t to reach US$3010/t. Regular grade WMP to ship in March lifted 5%, slightly higher than the 4.6% expected by the NZX dairy derivatives market ahead of the event.

SMP prices were expected to lift 2.4%. Oceania product continues to command a premium over European product though prices for SMP sold by Arla also lifted slightly.
Butter prices rocketed up 8.8%.

The derivatives market had expected a 2% fall in the price of unsalted butter to ship in March despite the reduction in offer volumes. That grade and contract lifted 8.3%.
Anhydrous milk fat prices gained 2.2%. Regular grade AMF to ship in March was up 3.1%. To date,

AMF has held its value better than butter, which had a larger fall in price than AMF at auctions through the latter months of 2017.

Cheddar prices lifted 5.2% and rennet casein was up 5.5%.

An index for lactose was again not published. However, the United States lactose pool published an average price of US$397/t – a 48% decline from the last time an average price for lactose was published in September.

But the excellent results might not last, Kilsby said.

“Poor milk production from NZ should be supporting prices for WMP and AMF as NZ is the key supplier of these commodities.

“But global milk production is continuing to grow – notably that coming out of Europe and the US – so plenty more SMP, butter and cheese will make its way onto the global market in coming months.

There were 129 winning bidders for 23,319t of product sold.

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