Global Dairy Trade Results Update – 11/15/16
Global Dairy Trade Results Update – 11/15/16
Executive Summary
Dairy product prices continued to increase during the GDT event held Nov 15th. Highlights from the most recent auction include:
The GDT Price Index finished 51.1% above the previous year price levels at the Nov 15th event and 10.1% above the three year average price for the second auction of November. The GDT Price Index has increased on a YOY basis throughout the past 12 events.
Within the latest auction, price gains were widespread across products and led by butter milk powder (+13.3%), followed by cheddar cheese (+11.0%), skim milk powder (+9.8%), lactose (+4.6%), anhydrous milkfat (+4.4%), whole milk powder (+3.2%), butter (+1.1%) and rennet casein (+0.6%).
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 Nov 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 Nov 15th event of 23,902 MT finished 13.8% below the previous auction. GDT quantities sold typically reach seasonal highs throughout the months of August and September prior to declining over the following several months.
Volumes sold for all products within the November auctions finished 19.4% below last year’s average volumes sold for the month of November and 38.2% below the previous three year average November quantities sold.
U.S. butter prices continue to remain at a slight premium to GDT winning prices through the Nov 15th event, despite GDT butter prices increasing by over 50% throughout the past four months. U.S. spot butter prices are currently trading at a 7.2% premium to GDT prices while CME futures prices are trading at an 8.1% premium to GDT prices from Dec ’16 – May ’17. 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.
U.S. cheddar cheese futures prices also continue to remain at a slight premium to GDT winning prices, despite GDT cheddar cheese prices reaching a new two year high at the Nov 15th event. U.S. spot cheddar cheese prices traded 1.7% above GDT prices while CME futures prices are trading at a 1.4% premium to GDT prices from Dec ’16 – Apr ’17. Cheddar cheese was not sold at the GDT auction for Contract 6 (May ’17).
U.S. NFDM spot prices are currently trading 26.6% below GDT prices as GDT SMP prices reached a 20 month high at the Nov 15th event. U.S. NFDM prices are expected to remain at a discount to GDT SMP prices throughout future months, as GDT prices are trading at a 16.6% average premium to U.S. prices from Dec ’16 – May ’17.
- The GDT Price Index increased 4.5% at the Nov 15th event, finishing higher for the seventh time in the past eight auctions and reaching a new two year high.
- Increases in prices at the Nov 15th event were widespread across all products and led by butter milk powder, followed by cheddar cheese. Whole milk powder prices also continued to increase, finishing at the highest figure experienced since Jul ’14.
- Total quantities sold for all products at the Nov 15th event declined 13.8% from the previous auction as volumes continue to decline seasonally. Total quantities sold at the Nov 15th event finished 19.4% below last year’s average volumes sold for the month of November.
The GDT Price Index finished 51.1% above the previous year price levels at the Nov 15th event and 10.1% above the three year average price for the second auction of November. The GDT Price Index has increased on a YOY basis throughout the past 12 events.
Within the latest auction, price gains were widespread across products and led by butter milk powder (+13.3%), followed by cheddar cheese (+11.0%), skim milk powder (+9.8%), lactose (+4.6%), anhydrous milkfat (+4.4%), whole milk powder (+3.2%), butter (+1.1%) and rennet casein (+0.6%).
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 Nov 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 Nov 15th event of 23,902 MT finished 13.8% below the previous auction. GDT quantities sold typically reach seasonal highs throughout the months of August and September prior to declining over the following several months.
Volumes sold for all products within the November auctions finished 19.4% below last year’s average volumes sold for the month of November and 38.2% below the previous three year average November quantities sold.
U.S. butter prices continue to remain at a slight premium to GDT winning prices through the Nov 15th event, despite GDT butter prices increasing by over 50% throughout the past four months. U.S. spot butter prices are currently trading at a 7.2% premium to GDT prices while CME futures prices are trading at an 8.1% premium to GDT prices from Dec ’16 – May ’17. 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.
U.S. cheddar cheese futures prices also continue to remain at a slight premium to GDT winning prices, despite GDT cheddar cheese prices reaching a new two year high at the Nov 15th event. U.S. spot cheddar cheese prices traded 1.7% above GDT prices while CME futures prices are trading at a 1.4% premium to GDT prices from Dec ’16 – Apr ’17. Cheddar cheese was not sold at the GDT auction for Contract 6 (May ’17).
U.S. NFDM spot prices are currently trading 26.6% below GDT prices as GDT SMP prices reached a 20 month high at the Nov 15th event. U.S. NFDM prices are expected to remain at a discount to GDT SMP prices throughout future months, as GDT prices are trading at a 16.6% average premium to U.S. prices from Dec ’16 – May ’17.