Global Dairy Trade Results Update – 4/17/18
Executive Summary
Dairy product prices increased during the GDT event held Apr 17th. Highlights from the most recent auction include:
The GDT Price Index remained higher on a YOY basis for the sixth consecutive auction, finishing 3.9% above previous year price levels at the Apr 17th event. The GDT Price Index finished 30.1% above the three year average price for the second auction of April.
Within the latest auction, increases in prices were widespread and led by lactose (+14.8%), followed by anhydrous milkfat (+5.3%), cheddar cheese (+4.6%), skim milk powder (+3.6%), rennet casein (+3.1%), butter (+2.9%) and whole milk powder (+0.9%). Butter milk powder was not offered at the Apr 17th 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 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 16th 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 17th event of 19,262 MT rebounded 11.8% from the four and a half year low experienced during the previous auction. The increase in total quantities sold was the first experienced throughout the past eight auctions.
Volumes sold for all products within the April auctions declined 3.8% from average March volumes sold while also remaining 19.9% below last year’s average volumes sold for the month of April. Volume sold for all products within the April auctions finished 20.8% below the previous three year average April quantities sold.
U.S. butter prices remained at a discount to GDT winning prices at the Apr 17th event as GDT butter prices increased to a six month high. U.S. spot butter prices are currently trading at a 6.0% discount to GDT prices while CME futures prices traded at a 5.3% 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 17th event, as GDT cheddar cheese prices increased to a five month high. U.S. spot cheddar cheese prices are currently trading at a 12.5% discount to GDT prices while CME futures prices traded at a 5.5% 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 17th event as GDT SMP prices rebounded from the previous event. U.S. spot NFDM prices are currently trading at a 15.2% discount to GDT prices while CME futures prices traded at a 12.0% 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 increased for the first time in the past five auctions during the Apr 17th event, finishing up 2.7% to a five auction high.
- Increases in prices within the Apr 17th event were widespread across products offered and led by lactose, followed by anhydrous milkfat, cheddar cheese and skim milk powder. Cheddar cheese prices finished at a five month high throughout the auction. Butter and whole milk powder prices also strengthened throughout the event, finishing at six and 11 month highs, respectively.
- Total quantities sold for all products at the Apr 17th event rebounded 11.8% from the four and a half year low experienced during the previous auction. Total quantities sold within the April auctions remained 19.9% below last year’s average volumes sold for the month of April and 20.8% below the previous three year average April quantities sold, however.
The GDT Price Index remained higher on a YOY basis for the sixth consecutive auction, finishing 3.9% above previous year price levels at the Apr 17th event. The GDT Price Index finished 30.1% above the three year average price for the second auction of April.
Within the latest auction, increases in prices were widespread and led by lactose (+14.8%), followed by anhydrous milkfat (+5.3%), cheddar cheese (+4.6%), skim milk powder (+3.6%), rennet casein (+3.1%), butter (+2.9%) and whole milk powder (+0.9%). Butter milk powder was not offered at the Apr 17th 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 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 16th 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 17th event of 19,262 MT rebounded 11.8% from the four and a half year low experienced during the previous auction. The increase in total quantities sold was the first experienced throughout the past eight auctions.
Volumes sold for all products within the April auctions declined 3.8% from average March volumes sold while also remaining 19.9% below last year’s average volumes sold for the month of April. Volume sold for all products within the April auctions finished 20.8% below the previous three year average April quantities sold.
U.S. butter prices remained at a discount to GDT winning prices at the Apr 17th event as GDT butter prices increased to a six month high. U.S. spot butter prices are currently trading at a 6.0% discount to GDT prices while CME futures prices traded at a 5.3% 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 17th event, as GDT cheddar cheese prices increased to a five month high. U.S. spot cheddar cheese prices are currently trading at a 12.5% discount to GDT prices while CME futures prices traded at a 5.5% 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 17th event as GDT SMP prices rebounded from the previous event. U.S. spot NFDM prices are currently trading at a 15.2% discount to GDT prices while CME futures prices traded at a 12.0% discount to GDT prices from May ’18 – Sep ’18. SMP was not sold at the GDT auction for Contract 6 (Oct ’18).