Wednesday, July 6, 2022

Prices soften further on GDT

Prices eased a further 5.3% at the latest GlobalDairyTrade auction.  The combination of: a weaker market, an increase in the volume of product available at this auction plus the downwards sloping forward pricing curve resulted in the lower prices.  

The supply of dairy commodities is tight for nearly delivery due to the abrupt end to the New Zealand milk production season due to the drought.  For some time new season product has been priced considerably below old season product and therefore as more of the GDT contract periods fall into the new season then downwards pressure would be put on average prices as has been the case at the most recent auction.  Whole milk powder (WMP) prices retreated the most at the latest auction with average prices easing back by 7.1%.  Prices for nearby deliveries dropped from their recent highs with Fonterra product for July and August deliveries priced at US$5230 to $5305/tonne.  The average price for the Contract 1 month was also influenced by the small quantity of Amul supplied product which fetched US$3995/tonne at its initial offering on GDT.  Overall the WMP forward price curve flatten slightly with prices easing for nearby deliveries and lifting slightly for November and December deliveries.  SMP supplied by Amul also traded at a slight discount to other suppliers.  Contract 2 Medium Heat SMP traded between US$3245 – $4305/tonne depending on supplier.  


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