Global Dairy Trade Results Update – 8/20/19
Executive Summary
Dairy product prices declined during the GDT event held Aug 20th. Highlights from the most recent auction include:
The GDT Price Index remained 6.2% above previous year price levels at the Aug 20th event, however, increasing on a YOY basis for the fourth consecutive event. The GDT Price Index also finished 5.3% above the three year average price for the second auction of August, finishing above three year average figures for the 16th consecutive event.
Within the latest auction, declines in prices were led by rennet casein (-8.1%), followed by lactose (-3.7%), anhydrous milkfat (-3.7%), butter (-3.4%) and skim milk powder (-0.3%). The declines more than offset increases in cheddar cheese (+0.8%) and whole milk powder (+2.1%) prices. Butter milk powder and sweet whey powder were not sold at the Aug 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 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 Aug 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 Aug 20th event of 34,410 MT declined 1.6% from the 15 auction high experienced during the previous auction but remained higher on a YOY basis for the second consecutive month, finishing up 7.4%.
Volumes sold for all products within the August auctions increased seasonally by 39.6% from average July volumes sold while finishing 4.9% above last year’s average volumes sold for the month of August, reaching a three year seasonal high level.
U.S. butter prices remained at a premium to GDT winning prices at the Aug 20th event as GDT butter prices declined to an eight month low throughout the most recent auction. U.S. spot butter prices are currently trading at a 30.8% premium to GDT prices while CME futures prices traded at a 29.5% premium to GDT prices from Sep ’19 – Feb ’20.
U.S. cheddar cheese prices remained at a slight premium to GDT winning prices at the Aug 20th event, despite GDT cheddar cheese prices increasing from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 0.1% premium to GDT prices while CME futures prices traded at a 3.9% premium to GDT prices from Sep ’19 – Jan ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Feb ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Aug 20th event, despite GDT SMP prices declining from the previous auction. U.S. spot NFDM prices are currently trading at an 11.0% discount to GDT prices while CME futures prices traded at an 8.6% discount to GDT prices from Sep ’19 – Jan ’20. SMP was not sold at the GDT auction for Contract 6 (Feb ’20).
- The GDT Price Index declined 0.2% at the Aug 20th event, finishing lower for the sixth time in the past seven events and reaching a 14 auction low overall.
- Declines in prices within the Aug 20th event were led by rennet casein, followed by lactose, anhydrous milkfat, butter and skim milk powder. Butter and anhydrous milkfat prices each declined to eight month low levels throughout the event. Whole milk powder prices increased from the previous event, however, reaching a five auction high, while cheddar cheese prices also increased from the previous auction.
- Total quantities sold for all products at the Aug 20th event declined 1.6% from the 15 auction high experienced during the previous auction but remained higher on a YOY basis for the second consecutive month, finishing up 7.4%. Volumes sold for all products within the August auctions finished 4.9% above last year’s average volumes sold for the month of August, reaching a three year seasonal high level.
The GDT Price Index remained 6.2% above previous year price levels at the Aug 20th event, however, increasing on a YOY basis for the fourth consecutive event. The GDT Price Index also finished 5.3% above the three year average price for the second auction of August, finishing above three year average figures for the 16th consecutive event.
Within the latest auction, declines in prices were led by rennet casein (-8.1%), followed by lactose (-3.7%), anhydrous milkfat (-3.7%), butter (-3.4%) and skim milk powder (-0.3%). The declines more than offset increases in cheddar cheese (+0.8%) and whole milk powder (+2.1%) prices. Butter milk powder and sweet whey powder were not sold at the Aug 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 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 Aug 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 Aug 20th event of 34,410 MT declined 1.6% from the 15 auction high experienced during the previous auction but remained higher on a YOY basis for the second consecutive month, finishing up 7.4%.
Volumes sold for all products within the August auctions increased seasonally by 39.6% from average July volumes sold while finishing 4.9% above last year’s average volumes sold for the month of August, reaching a three year seasonal high level.
U.S. butter prices remained at a premium to GDT winning prices at the Aug 20th event as GDT butter prices declined to an eight month low throughout the most recent auction. U.S. spot butter prices are currently trading at a 30.8% premium to GDT prices while CME futures prices traded at a 29.5% premium to GDT prices from Sep ’19 – Feb ’20.
U.S. cheddar cheese prices remained at a slight premium to GDT winning prices at the Aug 20th event, despite GDT cheddar cheese prices increasing from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 0.1% premium to GDT prices while CME futures prices traded at a 3.9% premium to GDT prices from Sep ’19 – Jan ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Feb ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Aug 20th event, despite GDT SMP prices declining from the previous auction. U.S. spot NFDM prices are currently trading at an 11.0% discount to GDT prices while CME futures prices traded at an 8.6% discount to GDT prices from Sep ’19 – Jan ’20. SMP was not sold at the GDT auction for Contract 6 (Feb ’20).