Global Dairy Trade Results Update – 4/3/18
Executive Summary
Dairy product prices declined during the GDT event held Apr 3rd. Highlights from the most recent auction include:
Despite the decline, the GDT Price Index remained higher on a YOY basis for the fifth consecutive auction, finishing 4.4% above previous year price levels at the Apr 3rd event. The GDT Price Index finished 28.1% above the three year average price for the first auction of April.
Within the latest auction, declines in prices were led by anhydrous milkfat (-7.0%), followed by skim milk powder (-1.8%). The declines more than offset increases in butter milk powder (+1.0%), lactose (+1.1%), whole milk powder (+1.6%), cheddar cheese (+2.2%), butter (+4.1%) and rennet casein (+12.1%) prices.
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 SMP has been adjusted to 35% protein content (equivalent to U.S. NFDM) in the $/lb columns below. CME spot and average futures prices are based on Apr 2nd 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 Apr 3rd event of 17,222 MT declined 7.6% from the previous auction, finishing at a four and a half year low. Total quantities sold have declined from the previous auction over seven consecutive events.
Volumes sold for all products within the first auction of April declined 9.2% from average March volumes sold while finishing 24.4% below last year’s average volumes sold for the month of April. Volume sold for all products within the first auction of April finished 25.2% below the previous three year average April quantities sold.
U.S. butter prices finished at a discount to GDT winning prices at the Apr 3rd event as GDT butter prices increased to a ten auction high. U.S. spot butter prices are currently trading at an 8.7% discount to GDT prices while CME futures prices traded at a 5.1% discount to GDT prices from May ’18 – Sep ’18. Butter was not sold at the GDT auction for Contract 6 (Oct ’18). U.S. butter prices traded at an 83.3% premium to GDT butter prices over the second half of 2014 and a 53.9% premium to GDT butter prices throughout 2015 prior to prices converging over the second half of 2016 and into 2017.
U.S. cheddar cheese futures prices also finished at a discount to GDT winning prices at the Apr 3rd event, as GDT cheddar cheese prices rebounded from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 13.4% discount to GDT prices while CME futures prices traded at a 3.4% discount to GDT prices from May ’18 – Sep ’18. Cheddar cheese was not sold at the GDT auction for Contract 4 (Aug ’18) and Contract 6 (Oct ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Apr 3rd event, despite GDT SMP prices declining from the previous event. U.S. spot NFDM prices are currently trading at a 20.1% discount to GDT prices while CME futures prices traded at a 12.9% discount to GDT prices from May ’18 – Sep ’18. SMP was not sold at the GDT auction for Contract 6 (Oct ’18).
- The GDT Price Index declined for the fourth consecutive auction during the Apr 3rd event, finishing down 0.6%.
- Declines in prices within the Apr 3rd event were led by anhydrous milkfat, followed by skim milk powder. Anhydrous milkfat prices declined to a 12 month low throughout the auction while skim milk powder prices finished at a three auction low. Whole milk powder strengthened throughout the event, finishing at a ten month high, while cheddar cheese and butter prices also finished higher.
- Total quantities sold for all products at the Apr 3rd event declined 7.6% from the previous auction, finishing at a four and a half year low. Total quantities sold within the first auction of April finished 24.4% below last year’s average volumes sold for the month of April and 25.2% below the previous three year average April quantities sold.
Despite the decline, the GDT Price Index remained higher on a YOY basis for the fifth consecutive auction, finishing 4.4% above previous year price levels at the Apr 3rd event. The GDT Price Index finished 28.1% above the three year average price for the first auction of April.
Within the latest auction, declines in prices were led by anhydrous milkfat (-7.0%), followed by skim milk powder (-1.8%). The declines more than offset increases in butter milk powder (+1.0%), lactose (+1.1%), whole milk powder (+1.6%), cheddar cheese (+2.2%), butter (+4.1%) and rennet casein (+12.1%) prices.
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 SMP has been adjusted to 35% protein content (equivalent to U.S. NFDM) in the $/lb columns below. CME spot and average futures prices are based on Apr 2nd 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 Apr 3rd event of 17,222 MT declined 7.6% from the previous auction, finishing at a four and a half year low. Total quantities sold have declined from the previous auction over seven consecutive events.
Volumes sold for all products within the first auction of April declined 9.2% from average March volumes sold while finishing 24.4% below last year’s average volumes sold for the month of April. Volume sold for all products within the first auction of April finished 25.2% below the previous three year average April quantities sold.
U.S. butter prices finished at a discount to GDT winning prices at the Apr 3rd event as GDT butter prices increased to a ten auction high. U.S. spot butter prices are currently trading at an 8.7% discount to GDT prices while CME futures prices traded at a 5.1% discount to GDT prices from May ’18 – Sep ’18. Butter was not sold at the GDT auction for Contract 6 (Oct ’18). U.S. butter prices traded at an 83.3% premium to GDT butter prices over the second half of 2014 and a 53.9% premium to GDT butter prices throughout 2015 prior to prices converging over the second half of 2016 and into 2017.
U.S. cheddar cheese futures prices also finished at a discount to GDT winning prices at the Apr 3rd event, as GDT cheddar cheese prices rebounded from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 13.4% discount to GDT prices while CME futures prices traded at a 3.4% discount to GDT prices from May ’18 – Sep ’18. Cheddar cheese was not sold at the GDT auction for Contract 4 (Aug ’18) and Contract 6 (Oct ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Apr 3rd event, despite GDT SMP prices declining from the previous event. U.S. spot NFDM prices are currently trading at a 20.1% discount to GDT prices while CME futures prices traded at a 12.9% discount to GDT prices from May ’18 – Sep ’18. SMP was not sold at the GDT auction for Contract 6 (Oct ’18).