Global Dairy Trade Results Update – 9/17/19
Executive Summary
Dairy product prices strengthened during the GDT event held Sep 17th. Highlights from the most recent auction include:
The GDT Price Index finished 10.1% above previous year price levels at the Sep 17th event, increasing on a YOY basis for the sixth consecutive event. The GDT Price Index also finished 4.3% above the three year average price for the second auction of September, finishing above three year average figures for the 18th consecutive event.
Within the latest auction, increases in prices were led by lactose (+5.6%), followed by skim milk powder (+3.4%), butter (+2.7%), whole milk powder (+1.9%), anhydrous milkfat (+0.6%) and cheddar cheese (+0.4%). The increases more than offset slightly lower rennet casein (-0.1%) prices. Butter milk powder and sweet whey powder were not sold at the Sep 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 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 Sep 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 Sep 17th event of 37,345 MT declined 5.9% from the 19 auction high experienced during the previous event while finishing 4.6% lower on a YOY basis. The YOY decline in total quantities sold was the first experienced throughout the past four events.
Volumes sold for all products within the September auctions increased seasonally by 11.0% from average August volumes sold but finished 1.2% below last year’s average volumes sold for the month of September. Sep ’19 volumes sold for all products remained 6.3% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Sep 17th event, despite GDT butter prices increasing to a three auction high. U.S. spot butter prices are currently trading at a 20.8% premium to GDT prices while CME futures prices traded at a 22.5% premium to GDT prices from Oct ’19 – Mar ’20.
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Sep 17th event, despite GDT cheddar cheese prices rebounding from the previous auction. U.S. spot cheddar cheese prices are currently trading at an 11.2% premium to GDT prices while CME futures prices traded at an 11.2% premium to GDT prices from Oct ’19 – Feb ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Mar ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Sep 17th event as GDT SMP prices increased to a two and a half year high level. U.S. spot NFDM prices are currently trading at a 13.1% discount to GDT prices while CME futures prices traded at a 9.1% discount to GDT prices from Oct ’19 – Feb ’20. SMP was not sold at the GDT auction for Contract 6 (Mar ’20).
- The GDT Price Index increased 2.0% at the Sep 17th event, finishing higher for just the second time in the past nine events and reaching a four auction high, overall.
- Increases in prices within the Sep 17th event were widespread with the exception of rennet casein and led by lactose, followed by skim milk powder, butter, whole milk powder, anhydrous milkfat and cheddar cheese. Skim milk powder prices reached a two and a half year high level throughout the Sep 17th event while whole milk powder prices reached a seven auction high and anhydrous milkfat and butter prices each rebounded from the eight month low levels experienced throughout the previous auction.
- Total quantities sold for all products at the Sep 17th event declined 5.9% from the 19 auction high experienced during the previous event while finishing 4.6% lower on a YOY basis. Volumes sold for all products within the September auctions finished 1.2% below last year’s average volumes sold for the month of September but remained 6.3% above three year average seasonal figures.
The GDT Price Index finished 10.1% above previous year price levels at the Sep 17th event, increasing on a YOY basis for the sixth consecutive event. The GDT Price Index also finished 4.3% above the three year average price for the second auction of September, finishing above three year average figures for the 18th consecutive event.
Within the latest auction, increases in prices were led by lactose (+5.6%), followed by skim milk powder (+3.4%), butter (+2.7%), whole milk powder (+1.9%), anhydrous milkfat (+0.6%) and cheddar cheese (+0.4%). The increases more than offset slightly lower rennet casein (-0.1%) prices. Butter milk powder and sweet whey powder were not sold at the Sep 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 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 Sep 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 Sep 17th event of 37,345 MT declined 5.9% from the 19 auction high experienced during the previous event while finishing 4.6% lower on a YOY basis. The YOY decline in total quantities sold was the first experienced throughout the past four events.
Volumes sold for all products within the September auctions increased seasonally by 11.0% from average August volumes sold but finished 1.2% below last year’s average volumes sold for the month of September. Sep ’19 volumes sold for all products remained 6.3% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Sep 17th event, despite GDT butter prices increasing to a three auction high. U.S. spot butter prices are currently trading at a 20.8% premium to GDT prices while CME futures prices traded at a 22.5% premium to GDT prices from Oct ’19 – Mar ’20.
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Sep 17th event, despite GDT cheddar cheese prices rebounding from the previous auction. U.S. spot cheddar cheese prices are currently trading at an 11.2% premium to GDT prices while CME futures prices traded at an 11.2% premium to GDT prices from Oct ’19 – Feb ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (Mar ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Sep 17th event as GDT SMP prices increased to a two and a half year high level. U.S. spot NFDM prices are currently trading at a 13.1% discount to GDT prices while CME futures prices traded at a 9.1% discount to GDT prices from Oct ’19 – Feb ’20. SMP was not sold at the GDT auction for Contract 6 (Mar ’20).