Global Dairy Trade Results Update – 1/17/17
Executive Summary
Dairy product prices increased slightly during the GDT event held Jan 17th. Highlights from the most recent auction include:
The GDT Price Index finished 46.9% above the previous year price levels at the Jan 17th event and 4.9% above the three year average price for the second auction of January. The GDT Price Index has increased on a YOY basis throughout the past 16 events.
Within the latest auction, increases in prices were led by rennet casein (+4.9%), followed by anhydrous milkfat (+3.7%), butter (+1.6%) and cheddar cheese (+1.3%). The increases more than offset declines in prices experienced within whole milk powder (-0.1%), skim milk powder (-1.6%), lactose (-1.7%) and butter milk powder (-10.1%).
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 Jan 13th 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 Jan 17th event of 22,030 MT finished 1.6% below the previous auction, reaching a 16 auction low. 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 January auctions finished 6.7% below last year’s average volumes sold for the month of January and 33.4% below the previous three year average January quantities sold.
U.S. butter prices continue to remain at a premium to GDT winning prices through the Jan 17th event, despite GDT butter prices increasing by over 60% throughout the past six months. U.S. spot butter prices are currently trading at a 14.7% premium to GDT prices while CME futures prices are trading at a 16.1% premium to GDT prices from Feb ’17 – Jul ’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 prior to prices converging over the second half of 2016.
U.S. cheddar cheese futures prices finished slightly below GDT winning prices as GDT cheddar cheese prices increased to a new two and a half year high at the Jan 17th event. U.S. spot cheddar cheese prices are currently trading 8.2% below GDT prices while CME futures prices are trading at a 1.0% discount to GDT prices from Feb ’17 – Jun ’17. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jul ’17).
U.S. NFDM spot prices are currently trading 15.3% below GDT prices despite GDT SMP prices declining slightly throughout the Jan 17th 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 10.7% average premium to U.S. prices from Feb ’17 – Jul ’17.
- The GDT Price Index increased for the first time in three auctions at the Jan 17th event, finishing 0.6% above the previous event but remaining at the second lowest level experienced over the past five auctions.
- Butter and cheddar cheese prices each increased over the sixth consecutive auction at the Jan 17th event while whole milk powder and skim milk powder prices finished lower. Whole milk powder prices declined 0.1%, finishing at a six auction low.
- Total quantities sold for all products at the Jan 17th event declined 1.6% from the previous auction, reaching a 16 auction low. Total quantities sold within the January events finished 6.7% below last year’s average volumes sold for the month of January.
The GDT Price Index finished 46.9% above the previous year price levels at the Jan 17th event and 4.9% above the three year average price for the second auction of January. The GDT Price Index has increased on a YOY basis throughout the past 16 events.
Within the latest auction, increases in prices were led by rennet casein (+4.9%), followed by anhydrous milkfat (+3.7%), butter (+1.6%) and cheddar cheese (+1.3%). The increases more than offset declines in prices experienced within whole milk powder (-0.1%), skim milk powder (-1.6%), lactose (-1.7%) and butter milk powder (-10.1%).
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 Jan 13th 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 Jan 17th event of 22,030 MT finished 1.6% below the previous auction, reaching a 16 auction low. 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 January auctions finished 6.7% below last year’s average volumes sold for the month of January and 33.4% below the previous three year average January quantities sold.
U.S. butter prices continue to remain at a premium to GDT winning prices through the Jan 17th event, despite GDT butter prices increasing by over 60% throughout the past six months. U.S. spot butter prices are currently trading at a 14.7% premium to GDT prices while CME futures prices are trading at a 16.1% premium to GDT prices from Feb ’17 – Jul ’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 prior to prices converging over the second half of 2016.
U.S. cheddar cheese futures prices finished slightly below GDT winning prices as GDT cheddar cheese prices increased to a new two and a half year high at the Jan 17th event. U.S. spot cheddar cheese prices are currently trading 8.2% below GDT prices while CME futures prices are trading at a 1.0% discount to GDT prices from Feb ’17 – Jun ’17. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jul ’17).
U.S. NFDM spot prices are currently trading 15.3% below GDT prices despite GDT SMP prices declining slightly throughout the Jan 17th 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 10.7% average premium to U.S. prices from Feb ’17 – Jul ’17.