Global Dairy Trade Results Update – 5/1/18
Executive Summary
Dairy product prices declined during the GDT event held May 1st. Highlights from the most recent auction include:
The GDT Price Index declined on a YOY basis for the first time in the past eight auctions, finishing 0.8% below previous year price levels at the May 1st event. The GDT Price Index remained 28.6% above the three year average price for the first auction of May, however.
Within the latest auction, declines in prices were led by rennet casein (-10.5%), followed by anhydrous milkfat (-1.9%) and whole milk powder (-1.5%). The declines more than offset increases in butter milk powder (+0.5%), lactose (+0.6%), cheddar cheese (+3.1%) and skim milk powder (+3.6%) prices. Butter prices were unchanged from the previous 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 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 May 1st event of 19,508 MT increased 1.3% from the previous auction, finishing at a five week high. The increase in total quantities sold was just the second experienced throughout the past nine auctions.
Volumes sold for all products within the first auction of May increased 6.9% from average April volumes sold but remained 11.1% below last year’s average volumes sold for the month of May. Volume sold for all products within the first auction of May finished 14.3% below the previous three year average May quantities sold.
U.S. butter prices finished at a discount to GDT winning prices at the May 1st event as GDT butter prices remained near recent six month highs. U.S. spot butter prices are currently trading at a 2.5% discount to GDT prices while CME futures prices traded at a 1.3% discount to GDT prices from Jun ’18 – Oct ’18. Butter was not sold at the GDT auction for Contract 6 (Nov ’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 May 1st event, as GDT cheddar cheese prices increased to a six month high. U.S. spot cheddar cheese prices are currently trading at a 10.9% discount to GDT prices while CME futures prices traded at a 7.2% discount to GDT prices from Jun ’18 – Oct ’18. Cheddar cheese was not sold at the GDT auction for Contract 3 (Aug ’18) and Contract 6 (Nov ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the May 1st event, as GDT SMP prices increased to a four auction high. U.S. spot NFDM prices are currently trading at a 1.0% discount to GDT prices while CME futures prices traded at a 4.9% discount to GDT prices from Jun ’18 – Oct ’18. SMP was not sold at the GDT auction for Contract 6 (Nov ’18).
- The GDT Price Index declined for the fifth time in the past six auctions during the May 1st event, finishing down 1.1%.
- Declines in prices within the May 1st event were led by rennet casein, followed by anhydrous milkfat and whole milk powder. Anhydrous milkfat prices finished at the second lowest level experienced throughout the past 12 months while whole milk powder prices finished at a three auction low. Cheddar cheese prices increased to a six month high throughout the event while skim milk powder prices finished at a four auction high. Butter prices finished unchanged from the previous event, remaining near six month high levels.
- Total quantities sold for all products at the May 1st event increased 1.3% from the previous auction, finishing at a five week high. Total quantities sold within the first auction of May remained 11.1% below last year’s average volumes sold for the month of May and 14.3% below the previous three year average May quantities sold, however.
The GDT Price Index declined on a YOY basis for the first time in the past eight auctions, finishing 0.8% below previous year price levels at the May 1st event. The GDT Price Index remained 28.6% above the three year average price for the first auction of May, however.
Within the latest auction, declines in prices were led by rennet casein (-10.5%), followed by anhydrous milkfat (-1.9%) and whole milk powder (-1.5%). The declines more than offset increases in butter milk powder (+0.5%), lactose (+0.6%), cheddar cheese (+3.1%) and skim milk powder (+3.6%) prices. Butter prices were unchanged from the previous 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 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 May 1st event of 19,508 MT increased 1.3% from the previous auction, finishing at a five week high. The increase in total quantities sold was just the second experienced throughout the past nine auctions.
Volumes sold for all products within the first auction of May increased 6.9% from average April volumes sold but remained 11.1% below last year’s average volumes sold for the month of May. Volume sold for all products within the first auction of May finished 14.3% below the previous three year average May quantities sold.
U.S. butter prices finished at a discount to GDT winning prices at the May 1st event as GDT butter prices remained near recent six month highs. U.S. spot butter prices are currently trading at a 2.5% discount to GDT prices while CME futures prices traded at a 1.3% discount to GDT prices from Jun ’18 – Oct ’18. Butter was not sold at the GDT auction for Contract 6 (Nov ’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 May 1st event, as GDT cheddar cheese prices increased to a six month high. U.S. spot cheddar cheese prices are currently trading at a 10.9% discount to GDT prices while CME futures prices traded at a 7.2% discount to GDT prices from Jun ’18 – Oct ’18. Cheddar cheese was not sold at the GDT auction for Contract 3 (Aug ’18) and Contract 6 (Nov ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the May 1st event, as GDT SMP prices increased to a four auction high. U.S. spot NFDM prices are currently trading at a 1.0% discount to GDT prices while CME futures prices traded at a 4.9% discount to GDT prices from Jun ’18 – Oct ’18. SMP was not sold at the GDT auction for Contract 6 (Nov ’18).