Global Dairy Trade Results Update – 10/15/19
Executive Summary
Dairy product prices increased slightly during the GDT event held Oct 15th. Highlights from the most recent auction include:
The GDT Price Index finished 13.3% above previous year price levels at the Oct 15th event, increasing on a YOY basis for the eighth consecutive event. The GDT Price Index also finished 7.7% above the three year average price for the second auction of October, finishing above three year average figures for the 20th consecutive event.
Within the latest auction, increases in prices were led by rennet casein (+3.6%), followed by skim milk powder (+2.4%) and anhydrous milkfat (+0.8%). The increases more than offset lower butter (-0.4%) and cheddar cheese (-2.2%) prices. Whole milk powder prices finished flat while lactose, butter milk powder and sweet whey powder were not sold at the Oct 15th 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 Oct 14th 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 Oct 15th event of 38,712 MT declined slightly from the previous event while remaining 7.7% lower on a YOY basis. The YOY decline in total quantities sold was the third experienced in a row.
Volumes sold for all products within the October auctions increased seasonally by 0.5% from average September volumes sold but finished 7.7% below last year’s average volumes sold for the month of October. Oct ’19 volumes sold for all products remained 4.1% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Oct 15th event as GDT butter prices declined slightly. U.S. spot butter prices are currently trading at a 16.2% premium to GDT prices while CME futures prices traded at a 16.7% premium to GDT prices from Nov ’19 – Apr ’20.
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Oct 15th event as GDT cheddar cheese prices declined to an eight month low level. U.S. spot cheddar cheese prices are currently trading at a 24.2% premium to GDT prices while CME futures prices traded at a 10.2% premium to GDT prices from Nov ’19 – Mar ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Apr ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Oct 15th event as GDT SMP prices increased to a four and a half year high level. U.S. spot NFDM prices are currently trading at an 8.8% discount to GDT prices while CME futures prices traded at an 8.6% discount to GDT prices from Nov ’19 – Mar ’20. SMP was not sold at the GDT auction for Contract 6 (Apr ’20).
- The GDT Price Index increased 0.5% at the Oct 15th event, finishing higher for the third consecutive event and reaching a six auction high, overall.
- Increases in prices within the Oct 15th event were led by rennet casein, followed by skim milk powder and anhydrous milkfat. Skim milk powder prices reached a four and a half year high level throughout the Oct 15th event. Cheddar cheese prices declined to an eight month low level throughout the Oct 15th event, however, while butter prices finished slightly lower and whole milk powder prices finished unchanged.
- Total quantities sold for all products at the Oct 15th event declined slightly from the previous event while remaining 7.7% lower on a YOY basis. Volumes sold for all products within the October auctions finished 7.7% below last year’s average volumes sold for the month of October but remained 4.1% above three year average seasonal figures.
The GDT Price Index finished 13.3% above previous year price levels at the Oct 15th event, increasing on a YOY basis for the eighth consecutive event. The GDT Price Index also finished 7.7% above the three year average price for the second auction of October, finishing above three year average figures for the 20th consecutive event.
Within the latest auction, increases in prices were led by rennet casein (+3.6%), followed by skim milk powder (+2.4%) and anhydrous milkfat (+0.8%). The increases more than offset lower butter (-0.4%) and cheddar cheese (-2.2%) prices. Whole milk powder prices finished flat while lactose, butter milk powder and sweet whey powder were not sold at the Oct 15th 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 Oct 14th 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 Oct 15th event of 38,712 MT declined slightly from the previous event while remaining 7.7% lower on a YOY basis. The YOY decline in total quantities sold was the third experienced in a row.
Volumes sold for all products within the October auctions increased seasonally by 0.5% from average September volumes sold but finished 7.7% below last year’s average volumes sold for the month of October. Oct ’19 volumes sold for all products remained 4.1% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Oct 15th event as GDT butter prices declined slightly. U.S. spot butter prices are currently trading at a 16.2% premium to GDT prices while CME futures prices traded at a 16.7% premium to GDT prices from Nov ’19 – Apr ’20.
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Oct 15th event as GDT cheddar cheese prices declined to an eight month low level. U.S. spot cheddar cheese prices are currently trading at a 24.2% premium to GDT prices while CME futures prices traded at a 10.2% premium to GDT prices from Nov ’19 – Mar ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Apr ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Oct 15th event as GDT SMP prices increased to a four and a half year high level. U.S. spot NFDM prices are currently trading at an 8.8% discount to GDT prices while CME futures prices traded at an 8.6% discount to GDT prices from Nov ’19 – Mar ’20. SMP was not sold at the GDT auction for Contract 6 (Apr ’20).