Indications from the NZX derivatives market, the New Zealand-based exchange where dairy futures contracts are traded, suggest that the price of whole milk powder (WMP) may rise at the next GDT auction, pencilled for next week. Future prices for skimmed milk powder (SMP) also gained slightly during last week’s trade.

At the last GDT auction held on 17 November, the price for WMP declined by 11% to $2,148/t, while SMP prices were back more than 8% to a little over $1,850/t. However, since that GDT auction, futures prices for WMP have rallied, suggesting a recovery in prices. WMP is the key commodity traded on the GDT auction and a significant driver of the index performance.

WMP futures prices gained by more than 13% at the end of last week to finish Friday’s trade at $2375/t after strong volumes were traded for January and February 2016 contracts in the wake of the GDT result. Volumes of futures contracts were less strong for SMP futures but prices for February 2016 SMP increased by 4% to finish the week at $1960/t.

Butter futures saw little trading activity with prices relatively flat at $2,800/t for February 2016 butter.