Global Dairy Trade Results Update – 6/16/20
Executive Summary
Dairy product prices continued to increase during the GDT event held Jun 16th. Highlights from the most recent auction include:
The GDT Price Index remained 7.8% below previous year price levels at the Jun 16th auction, declining on a YOY basis for the ninth consecutive event. The GDT Price Index finished 11.5% below the three year average price for the second auction of June, finishing below three year average figures for the tenth consecutive event.
Within the latest auction, increases in prices were led by skim milk powder (+3.1%), followed by whole milk powder (+2.2%), cheddar cheese (+1.4%), anhydrous milkfat (+0.8%) and lactose (+0.4%). The increases more than offset a decline in butter (-1.0%) prices. Butter milk powder and sweet whey powder were not sold at the Jun 16th 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 Jun 15th 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 Jun 16th event declined 2.5% from the previous event while finishing 11.7% lower on a YOY basis. The YOY decline in total quantities sold was the first experienced throughout the past 12 auctions. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout the month of June.
Volumes sold for all products within the June actions increased 30.5% from average May volumes sold but finished 1.7% below last year’s average volumes sold for the month of June. Jun ’20 volumes sold for all products finished 0.3% below three year average seasonal figures.
U.S. butter prices remained at a premium to GDT winning prices at the Jun 16th event as GDT butter prices declined to a three and a half year low level. U.S. spot butter prices are currently trading at a 16.1% premium to GDT prices while CME futures prices traded at a 23.0% premium to GDT prices from Jul ’20 – Dec ’20.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Jun 16th event, despite GDT cheddar cheese prices rebounding from the 16 month low level experienced throughout the previous auction. U.S. spot cheddar cheese prices are currently trading at a 46.3% premium to GDT prices while CME futures prices traded at a 7.6% premium to GDT prices from Jul ’20 – Dec ’20.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Jun 16th event, as GDT SMP prices rebounded to a three month high level. U.S. spot NFDM prices are currently trading at a 16.9% discount to GDT SMP prices while CME futures prices traded at a 9.0% discount to GDT SMP prices from Jul ’20 – Nov ’20. SMP was not sold at the GDT auction for Contract 6 (Dec ’20).
- The GDT Price Index increased 1.9% at the Jun 16th event, finishing higher for the third consecutive event.
- Increases in prices within the Jun 16th event were widespread across products offered with the exception of butter, which declined to a three and a half year low level. Whole milk powder and skim milk powder prices each increased to three month high levels throughout the Jun 16th event, while cheddar cheese prices rebounded from the 16 month low level experienced throughout the previous auction.
- Total quantities sold for all products at the Jun 16th event declined 2.5% from the previous auction while finishing 11.7% lower on a YOY basis. The YOY decline in total quantities sold was the first experienced throughout the past 12 auctions.
The GDT Price Index remained 7.8% below previous year price levels at the Jun 16th auction, declining on a YOY basis for the ninth consecutive event. The GDT Price Index finished 11.5% below the three year average price for the second auction of June, finishing below three year average figures for the tenth consecutive event.
Within the latest auction, increases in prices were led by skim milk powder (+3.1%), followed by whole milk powder (+2.2%), cheddar cheese (+1.4%), anhydrous milkfat (+0.8%) and lactose (+0.4%). The increases more than offset a decline in butter (-1.0%) prices. Butter milk powder and sweet whey powder were not sold at the Jun 16th 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 Jun 15th 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 Jun 16th event declined 2.5% from the previous event while finishing 11.7% lower on a YOY basis. The YOY decline in total quantities sold was the first experienced throughout the past 12 auctions. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout the month of June.
Volumes sold for all products within the June actions increased 30.5% from average May volumes sold but finished 1.7% below last year’s average volumes sold for the month of June. Jun ’20 volumes sold for all products finished 0.3% below three year average seasonal figures.
U.S. butter prices remained at a premium to GDT winning prices at the Jun 16th event as GDT butter prices declined to a three and a half year low level. U.S. spot butter prices are currently trading at a 16.1% premium to GDT prices while CME futures prices traded at a 23.0% premium to GDT prices from Jul ’20 – Dec ’20.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Jun 16th event, despite GDT cheddar cheese prices rebounding from the 16 month low level experienced throughout the previous auction. U.S. spot cheddar cheese prices are currently trading at a 46.3% premium to GDT prices while CME futures prices traded at a 7.6% premium to GDT prices from Jul ’20 – Dec ’20.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Jun 16th event, as GDT SMP prices rebounded to a three month high level. U.S. spot NFDM prices are currently trading at a 16.9% discount to GDT SMP prices while CME futures prices traded at a 9.0% discount to GDT SMP prices from Jul ’20 – Nov ’20. SMP was not sold at the GDT auction for Contract 6 (Dec ’20).