Global Dairy Trade Results Update – 9/3/19
Executive Summary
Dairy product prices continued to decline during the GDT event held Sep 3rd. Highlights from the most recent auction include:
The GDT Price Index remained 6.5% above previous year price levels at the Sep 3rd event, however, increasing on a YOY basis for the fifth consecutive event. The GDT Price Index also finished 2.7% above the three year average price for the first auction of September, finishing above three year average figures for the 17th consecutive event.
Within the latest auction, declines in prices were led by anhydrous milkfat (-1.5%), followed by lactose (-0.9%), cheddar cheese (-0.8%) and whole milk powder (-0.8%). The declines more than offset increases in skim milk powder (+0.7%), butter milk powder (+3.4%) and rennet casein (+4.6%) prices. Butter prices finished unchanged from the previous week while sweet whey powder was not sold at the Sep 3rd event.
The table below provides a summary of the most recent GDT weighted average winning prices for key products. Butter has been adjusted to 80% butterfat and skim milk powder (SMP) has been adjusted to 35% protein content (equivalent to U.S. nonfat dry milk) in the $/lb columns below. CME spot and average futures prices are based on Aug 30th figures. CME average futures prices are weighted average prices based on the most recently reported percentage of the total quantity sold in each GDT contract period.
Total quantities sold for all products at the Sep 3rd event of 39,689 MT increased seasonally by 15.3% from the previous auction, reaching a 19 auction high. Total quantities sold for all products finished higher on a YOY basis for the third consecutive auction, finishing up 2.3%.
Volumes sold for all products within the first auction of September increased seasonally by 14.4% from average August volumes sold while finishing 1.8% above last year’s average volumes sold for the month of September, reaching a five year seasonal high level.
U.S. butter prices remained at a premium to GDT winning prices at the Sep 3rd event as GDT butter prices finished unchanged from the eight month low level experienced throughout the previous auction. U.S. spot butter prices are currently trading at a 22.8% premium to GDT prices while CME futures prices traded at a 25.3% premium to GDT prices from Oct ’19 – Mar ’20.
U.S. cheddar cheese prices remained at a slight premium to GDT winning prices at the Sep 3rd event as GDT cheddar cheese prices declined from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 0.1% premium to GDT prices while CME futures prices traded at a 2.9% premium to GDT prices from Oct ’19 – Feb ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Mar ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Sep 3rd event as GDT SMP prices increased from the previous auction. U.S. spot NFDM prices are currently trading at a 10.9% discount to GDT prices while CME futures prices traded at a 7.6% discount to GDT prices from Oct ’19 – Feb ’20. SMP was not sold at the GDT auction for Contract 6 (Mar ’20).
- The GDT Price Index declined 0.4% at the Sep 3rd event, finishing lower for the seventh time in the past eight events and reaching a 15 auction low, overall.
- Declines in prices within the Sep 3rd event were led by anhydrous milkfat, followed by lactose, cheddar cheese and whole milk powder, while butter prices finished unchanged from the previous event. Anhydrous milkfat and butter prices each finished at eight month low levels throughout the latest auction. The declines more than offset increases in skim milk powder, butter milk powder and rennet casein prices.
- Total quantities sold for all products at the Sep 3rd event increased seasonally by 15.3% from the previous auction, reaching a 19 auction high. Volumes sold for all products within the first auction of September finished 1.8% above last year’s average volumes sold for the month of September, reaching a five year seasonal high level.
The GDT Price Index remained 6.5% above previous year price levels at the Sep 3rd event, however, increasing on a YOY basis for the fifth consecutive event. The GDT Price Index also finished 2.7% above the three year average price for the first auction of September, finishing above three year average figures for the 17th consecutive event.
Within the latest auction, declines in prices were led by anhydrous milkfat (-1.5%), followed by lactose (-0.9%), cheddar cheese (-0.8%) and whole milk powder (-0.8%). The declines more than offset increases in skim milk powder (+0.7%), butter milk powder (+3.4%) and rennet casein (+4.6%) prices. Butter prices finished unchanged from the previous week while sweet whey powder was not sold at the Sep 3rd event.
The table below provides a summary of the most recent GDT weighted average winning prices for key products. Butter has been adjusted to 80% butterfat and skim milk powder (SMP) has been adjusted to 35% protein content (equivalent to U.S. nonfat dry milk) in the $/lb columns below. CME spot and average futures prices are based on Aug 30th figures. CME average futures prices are weighted average prices based on the most recently reported percentage of the total quantity sold in each GDT contract period.
Total quantities sold for all products at the Sep 3rd event of 39,689 MT increased seasonally by 15.3% from the previous auction, reaching a 19 auction high. Total quantities sold for all products finished higher on a YOY basis for the third consecutive auction, finishing up 2.3%.
Volumes sold for all products within the first auction of September increased seasonally by 14.4% from average August volumes sold while finishing 1.8% above last year’s average volumes sold for the month of September, reaching a five year seasonal high level.
U.S. butter prices remained at a premium to GDT winning prices at the Sep 3rd event as GDT butter prices finished unchanged from the eight month low level experienced throughout the previous auction. U.S. spot butter prices are currently trading at a 22.8% premium to GDT prices while CME futures prices traded at a 25.3% premium to GDT prices from Oct ’19 – Mar ’20.
U.S. cheddar cheese prices remained at a slight premium to GDT winning prices at the Sep 3rd event as GDT cheddar cheese prices declined from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 0.1% premium to GDT prices while CME futures prices traded at a 2.9% premium to GDT prices from Oct ’19 – Feb ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Mar ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Sep 3rd event as GDT SMP prices increased from the previous auction. U.S. spot NFDM prices are currently trading at a 10.9% discount to GDT prices while CME futures prices traded at a 7.6% discount to GDT prices from Oct ’19 – Feb ’20. SMP was not sold at the GDT auction for Contract 6 (Mar ’20).