Global Dairy Trade Results Update – 7/17/18
Executive Summary
Dairy product prices declined to a six month low during the GDT event held Jul 17th. Highlights from the most recent auction include:
The GDT Price Index also remained lower on a YOY basis for the sixth consecutive event, finishing 10.4% below previous year price levels at the Jul 17th event. The GDT Price Index remained 24.3% above the three year average price for the second auction of July, however.
Within the latest auction, declines in prices were led by rennet casein (-9.5%), followed by butter (-8.1%), anhydrous milkfat (-5.2%) and cheddar cheese (-3.3%). The declines more than offset increases in skim milk powder (+0.8%) and whole milk powder (+1.5%) prices. Lactose, butter milk powder and sweet whey powder were not offered at the Jul 17th 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 Jul 16th 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 Jul 17th event of 25,454 MT declined 4.0% from the six month high experienced during the previous event while also remaining lower on a YOY basis for the tenth time in the past 11 auctions, finishing down 4.6%.
Volumes sold for all products within the July auctions increased 20.3% from average June volumes sold but remained 6.0% below last year’s average volumes sold for the month of July. Volume sold for all products within July auctions finished 15.3% below the previous three year average July quantities sold.
U.S. butter prices finished at a premium to GDT winning prices at the Jul 17th event as GDT butter prices declined to a six month low. U.S. spot butter prices are currently trading at a 2.2% premium to GDT prices while CME futures prices traded at a 4.8% premium to GDT prices from Aug ’18 – Jan ’19. 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 finished at a slight premium to GDT winning prices at the Jul 17th event as GDT cheddar cheese prices declined to a six month low. U.S. spot cheddar cheese prices are currently trading at a 12.8% discount to GDT prices however CME futures prices traded at a 0.2% premium to GDT prices from Sep ’18 – Dec ’18. Cheddar cheese was not sold at the GDT auction for Contract 1 (Aug ’18) and Contract 6 (Jan ’19).
U.S. NFDM futures prices remained at a discount to GDT winning prices at the Jul 17th event as GDT SMP prices rebounded slightly from recently experienced three month lows. U.S. spot NFDM prices are currently trading at a 17.5% discount to GDT prices while CME futures prices traded at a 10.0% discount to GDT prices from Sep ’18 – Jan ’19. SMP was not sold at the GDT auction for Contract 1 (Aug ’18).
- The GDT Price Index declined for the ninth time in the past 11 auctions during the Jul 17th event, finishing down 1.7% to a six month low.
- Declines in prices within the Jul 17th event were led by rennet casein, followed by butter, anhydrous milkfat and cheddar cheese. Butter and cheddar cheese prices each declined to six month low levels while anhydrous milkfat prices finished at an 18 month low. Skim milk powder and whole milk powder prices increased throughout the Jul 17th event, however, rebounding from three and six month lows experienced during the previous auction, respectively.
- Total quantities sold for all products at the Jul 17th event declined 4.0% from the six month high experienced during the previous event. Total quantities sold within the July auctions increased seasonally but finished 6.0% below last year’s average volumes sold for the month of July and 15.3% below the previous three year average July quantities sold.
The GDT Price Index also remained lower on a YOY basis for the sixth consecutive event, finishing 10.4% below previous year price levels at the Jul 17th event. The GDT Price Index remained 24.3% above the three year average price for the second auction of July, however.
Within the latest auction, declines in prices were led by rennet casein (-9.5%), followed by butter (-8.1%), anhydrous milkfat (-5.2%) and cheddar cheese (-3.3%). The declines more than offset increases in skim milk powder (+0.8%) and whole milk powder (+1.5%) prices. Lactose, butter milk powder and sweet whey powder were not offered at the Jul 17th 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 Jul 16th 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 Jul 17th event of 25,454 MT declined 4.0% from the six month high experienced during the previous event while also remaining lower on a YOY basis for the tenth time in the past 11 auctions, finishing down 4.6%.
Volumes sold for all products within the July auctions increased 20.3% from average June volumes sold but remained 6.0% below last year’s average volumes sold for the month of July. Volume sold for all products within July auctions finished 15.3% below the previous three year average July quantities sold.
U.S. butter prices finished at a premium to GDT winning prices at the Jul 17th event as GDT butter prices declined to a six month low. U.S. spot butter prices are currently trading at a 2.2% premium to GDT prices while CME futures prices traded at a 4.8% premium to GDT prices from Aug ’18 – Jan ’19. 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 finished at a slight premium to GDT winning prices at the Jul 17th event as GDT cheddar cheese prices declined to a six month low. U.S. spot cheddar cheese prices are currently trading at a 12.8% discount to GDT prices however CME futures prices traded at a 0.2% premium to GDT prices from Sep ’18 – Dec ’18. Cheddar cheese was not sold at the GDT auction for Contract 1 (Aug ’18) and Contract 6 (Jan ’19).
U.S. NFDM futures prices remained at a discount to GDT winning prices at the Jul 17th event as GDT SMP prices rebounded slightly from recently experienced three month lows. U.S. spot NFDM prices are currently trading at a 17.5% discount to GDT prices while CME futures prices traded at a 10.0% discount to GDT prices from Sep ’18 – Jan ’19. SMP was not sold at the GDT auction for Contract 1 (Aug ’18).