Friday, March 29, 2024

GDT prices hold ground

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Dairy commodity prices held their ground at last night’s Global Dairy Trade auction with whole milk powder prices easing just 0.6% and the overall index down 0.4%.
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However, the derivatives market had predicted a WMP gain of 3.5%for regular grade WMP to ship in October. That contract fell 0.5%.

Prices for both anhydrous milk fat and butter again lost ground.

The price index for AMF fell 1.2% while the index for butter fell 1.3%. AMF prices had now eased at four consecutive sales while butter prices eased at the last two auctions.

Fonterra had moved offer volumes of milk fats for this auction. Product was moved away from the January contract to earlier dated contracts because demand for immediate delivery had been high.

Prices for January did make gains for both AMF and butter but it not enough to offset losses in other contract periods.

Offer volumes of milk fats would decline slightly over coming months as Fonterra directed milk into added-value products and WMP over New Zealand’s peak milk producing months.

“However, buyers haven’t taken notice of this yet and are relying on more fat being available from NZ as it lifts its milk production this season,” AgriHQ dairy analyst Susan Kilsby said.

Price movements were mixed. Skim milk powder, rennet casein and cheddar all gained while WMP, AMF, butter and lactose lost value.

The SMP price index gained 0.3% and reached an average price of US$1968/t.

SMP prices had been flat in Europe for several weeks, which was flowing through to Oceania prices. The market was waiting on a decision by the European Commission on what it would do with the stockpile of SMP in the government-run intervention scheme.

There were 140 winning bidders last night compared to 129 on August 1. The extra bidders were largely from South and Central America and Africa.

The number of winning bidders from North Asia was about the same as at the previous auction but they bought more this time.

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