By the close of trading on July 17, over 2,600 lots had been traded during the month. Whole milk powder (WMP) Futures have been most active, with 1,520 lots traded so far in July. On top of that, 500 lots of skim milk powder (SMP) Futures have traded and 600 lots of Anhydrous milkfat (AMF) Futures.
Kathryn Jaggard, Head of the NZX Derivatives Market, noted “a significant uptick in market activity”. Over 46,000 lots have now been traded since NZX Dairy Futures launched, with the total value of contracts traded now exceeding US$160 million. Jaggard also said there has been an increase in the size of the trades going through the market recently, reflecting traders’ growing confidence in the market.
WMP Futures trading in the past few days has largely centred on the nearest two contracts, being August 2013 and September 2013. Most recently these both traded at US$4,900, up US$400-$450 on trading levels seen prior to this week’s GlobalDairyTrade auction. Open interest for WMP extends out to January 2014, but a downwards sloping forwards price curve is evident, with the January settlement price at just US$4,200.
Trading of SMP Futures contracts has predominantly been for October and November, while open interest in the AMF Futures market is highest for November and December contracts. October through to December is typically the highest milk production period in the New Zealand season.