Futures prices for whole milk powder (WMP) have dipped in the last week, as markets react to the more subdued result at last week’s GDT event. October, November and December futures contracts for WMP declined by more than 3% in the last week which may suggest that the GDT has found a new level after recording strong growth since early August.

At last week’s auction, the GDT recorded its fourth consecutive increase, with the benchmark dairy index lifting another 1.7%. However, the real story of the auction was the flat performance of WMP, with prices declining a marginal 0.2% to $2,780/t. WMP is the most important commodity sold on the GDT, accounting for more than half of product sold at each auction.

Last week’s flat performance at the GDT, coupled with the 3% decline in futures prices in the last week, suggest WMP prices have found a new level after weeks of bullish price growth. The recent upturn in WMP prices had powered the GDT results since early August and this stalled momentum means we could be seeing the GDT plateauing.

The only upside has been the continued improvement in skimmed milk powder (SMP) prices, which rose a further 3% at last week’s GDT event. SMP has gained almost $300/t in the last few weeks, with the price premium narrowing between WMP and SMP prices once again. The difference had reached almost $700/t at one point this month.

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