Global Dairy Trade Results Update – 3/20/18
Executive Summary
Dairy product prices declined during the GDT event held Mar 20th. Highlights from the most recent auction include:
Despite the decline, the GDT Price Index remained higher on a YOY basis for the fourth consecutive auction, finishing 6.7% above previous year price levels at the Mar 20th event. The GDT Price Index finished 25.4% above the three year average price for the second auction of March.
Within the latest auction, declines in prices were led by skim milk powder (-8.6%), followed by cheddar cheese (-3.9%) and rennet casein (-2.9%). Anhydrous milkfat and butter prices were unchanged from the previous event while whole milk powder prices increased slightly (+0.1%). Lactose and butter milk powder were not offered at the Mar 20th 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 Mar 19th 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 Mar 20th event of 18,635 MT declined 3.4% from the previous auction, finishing at a 22 month low. Total quantities sold finished lower on a YOY basis for the third consecutive month, declining by 17.2%.
Volumes sold for all products within the March auctions declined 10.7% from average February volumes sold while finishing 15.4% below last year’s average volumes sold for the month of March. Volume sold for all products within the March auctions finished 12.1% below the previous three year average March quantities sold.
U.S. butter prices finished at a discount to GDT winning prices at the Mar 20th event as GDT butter prices remained near recently experienced seven auction highs. U.S. spot butter prices are currently trading at a 6.6% discount to GDT prices while CME futures prices traded at a 3.9% discount to GDT prices from Apr ’18 – Aug ’18. Butter was not sold at the GDT auction for Contract 6 (Sep ’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 Mar 20th event, despite GDT cheddar cheese prices declining to a four auction low. U.S. spot cheddar cheese prices are currently trading at a 4.7% discount to GDT prices while CME futures prices traded at a 2.4% discount to GDT prices from Apr ’18 – Jul ’18. Cheddar cheese was not sold at the GDT auction for Contract 5 (Aug ’18) and Contract 6 (Sep ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Mar 20th event, despite GDT SMP prices declining from the previous event. U.S. spot NFDM prices are currently trading at a 21.7% discount to GDT prices while CME futures prices traded at a 16.4% discount to GDT prices from Apr ’18 – Aug ’18. SMP was not sold at the GDT auction for Contract 6 (Sep ’18).
- The GDT Price Index declined for the third consecutive auction during the Mar 20th event, finishing down 1.2%.
- Declines in prices within the Mar 20th event were led by skim milk powder, followed by cheddar cheese and rennet casein. Skim milk powder prices remained at the third highest level experienced throughout the past 11 auctions however cheddar cheese prices declined to a four auction low. Whole milk powder, butter and anhydrous milkfat prices were largely unchanged from the previous event.
- Total quantities sold for all products at the Mar 20th event declined 3.4% from the previous auction, finishing at a 22 month low. Total quantities sold within the March auctions finished 15.4% below last year’s average volumes sold for the month of March and 12.1% below the previous three year average March quantities sold.
Despite the decline, the GDT Price Index remained higher on a YOY basis for the fourth consecutive auction, finishing 6.7% above previous year price levels at the Mar 20th event. The GDT Price Index finished 25.4% above the three year average price for the second auction of March.
Within the latest auction, declines in prices were led by skim milk powder (-8.6%), followed by cheddar cheese (-3.9%) and rennet casein (-2.9%). Anhydrous milkfat and butter prices were unchanged from the previous event while whole milk powder prices increased slightly (+0.1%). Lactose and butter milk powder were not offered at the Mar 20th 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 Mar 19th 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 Mar 20th event of 18,635 MT declined 3.4% from the previous auction, finishing at a 22 month low. Total quantities sold finished lower on a YOY basis for the third consecutive month, declining by 17.2%.
Volumes sold for all products within the March auctions declined 10.7% from average February volumes sold while finishing 15.4% below last year’s average volumes sold for the month of March. Volume sold for all products within the March auctions finished 12.1% below the previous three year average March quantities sold.
U.S. butter prices finished at a discount to GDT winning prices at the Mar 20th event as GDT butter prices remained near recently experienced seven auction highs. U.S. spot butter prices are currently trading at a 6.6% discount to GDT prices while CME futures prices traded at a 3.9% discount to GDT prices from Apr ’18 – Aug ’18. Butter was not sold at the GDT auction for Contract 6 (Sep ’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 Mar 20th event, despite GDT cheddar cheese prices declining to a four auction low. U.S. spot cheddar cheese prices are currently trading at a 4.7% discount to GDT prices while CME futures prices traded at a 2.4% discount to GDT prices from Apr ’18 – Jul ’18. Cheddar cheese was not sold at the GDT auction for Contract 5 (Aug ’18) and Contract 6 (Sep ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Mar 20th event, despite GDT SMP prices declining from the previous event. U.S. spot NFDM prices are currently trading at a 21.7% discount to GDT prices while CME futures prices traded at a 16.4% discount to GDT prices from Apr ’18 – Aug ’18. SMP was not sold at the GDT auction for Contract 6 (Sep ’18).