Futures contracts for whole milk powder (WMP), a proxy for results for the biweekly GDT, continue to show a degree of steadiness and stability that has not materialised in the performance of the benchmark dairy index.
In the run up to last week’s GDT auction, dairy futures had pointed to a steady or slight increase in the GDT index. However, the opposite happened on the day with the GDT index falling by almost 3% and the average selling price of WMP falling by nearly 1%, surprising many market commentators.
Since last week’s auction, dairy futures have continued to trade very steadily with May, June and July futures contracts for WMP back less than half a percentage point in price terms. In saying this, futures prices are still very weak and are showing no optimism for a rebound in dairy prices any time soon.
Falling New Zealand supply
Meanwhile, from the supply side of things, it appears that milk production in New Zealand for 2015/16 will fall by less than anticipated. Dairy giant Fonterra said that strong grass-growing conditions this summer in New Zealand had tapered the expected declines in milk supply somewhat.
In December, Fonterra had predicted a 6% decline in milk supply for the 2015/16 season, but the processor has now revised this forecast to a decline of just 4%, with milk collections for February only down 1% year-on-year.
In Europe, production continues to expand with milk supply from the 28 EU member states forecast to grow by an additional 1.4%, or 2bn litres, for 2016.
Read more
Dairy trends: GDT drops 3% despite lift in dairy futures prices
New Zealand drops forecasted milk price as global crisis deepens
Futures contracts for whole milk powder (WMP), a proxy for results for the biweekly GDT, continue to show a degree of steadiness and stability that has not materialised in the performance of the benchmark dairy index.
In the run up to last week’s GDT auction, dairy futures had pointed to a steady or slight increase in the GDT index. However, the opposite happened on the day with the GDT index falling by almost 3% and the average selling price of WMP falling by nearly 1%, surprising many market commentators.
Since last week’s auction, dairy futures have continued to trade very steadily with May, June and July futures contracts for WMP back less than half a percentage point in price terms. In saying this, futures prices are still very weak and are showing no optimism for a rebound in dairy prices any time soon.
Falling New Zealand supply
Meanwhile, from the supply side of things, it appears that milk production in New Zealand for 2015/16 will fall by less than anticipated. Dairy giant Fonterra said that strong grass-growing conditions this summer in New Zealand had tapered the expected declines in milk supply somewhat.
In December, Fonterra had predicted a 6% decline in milk supply for the 2015/16 season, but the processor has now revised this forecast to a decline of just 4%, with milk collections for February only down 1% year-on-year.
In Europe, production continues to expand with milk supply from the 28 EU member states forecast to grow by an additional 1.4%, or 2bn litres, for 2016.
Read more
Dairy trends: GDT drops 3% despite lift in dairy futures prices
New Zealand drops forecasted milk price as global crisis deepens
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