Looking at the dairy futures market in New Zealand, the NZX derivatives market, the indications are that we will see a lift in the GDT Index at Tuesday’s auction. Futures prices for whole milk powder (WMP), the key dairy commodity traded on the GDT, have traded ahead of the last GDT price for WMP by as much 14% on certain days with strong volumes in demand, particularly at the end of last week.

While the futures market is not a like-for-like certainty of what will happen at Tuesday’s GDT auction, the price of WMP on the index has tended to loosely follow the futures market, as can be seen on the graph below.

Last auction

At the last GDT auction held on 17 November, the price for WMP declined by 11% to $2,148/t. However, over the past two weeks the futures price of WMP on the NZX derivatives market has recorded strong gains.

The futures market reached a peak last Wednesday, when futures prices for WMP for February delivery settled at US$2,480/t – more than 14% ahead of the last GDT price.