Global Dairy Trade Results Update – 11/5/19
Executive Summary
Dairy product prices continued to increase during the GDT event held Nov 5th. Highlights from the most recent auction include:
The GDT Price Index finished 19.9% above previous year price levels at the Nov 5th event, increasing on a YOY basis for the ninth consecutive event. The GDT Price Index also finished 9.8% above the three year average price for the first auction of November, finishing above three year average figures for the 21st consecutive event. The GDT Price Index finished at a six year seasonal high level, overall.
Within the latest auction, increases in prices were led by skim milk powder (+6.7%), followed by butter milk powder (+5.4%), rennet casein (+5.1%), whole milk powder (+3.6%), anhydrous milkfat (+2.6%) and butter (+0.2%). The increases more than offset lower cheddar cheese (-0.6%) and lactose (-1.9%) prices. Sweet whey powder was not sold at the Nov 5th 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 Nov 4th 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 Nov 5th event of 38,681 MT declined slightly from the previous event while finishing 8.8% lower on a YOY basis. The YOY decline in total quantities sold was the fourth experienced in a row.
Volumes sold for all products within the first auction of November declined 0.1% from average October volumes sold while finishing 9.4% below last year’s average volumes sold for the month of November. Nov ’19 volumes sold for all products remained 12.0% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Nov 5th event, despite GDT butter prices increasing from the previous event. U.S. spot butter prices are currently trading at a 13.2% premium to GDT prices while CME futures prices traded at a 15.9% premium to GDT prices from Dec ’19 – May ’20.
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Nov 5th event as GDT cheddar cheese prices declined to a nine month low level. U.S. spot cheddar cheese prices are currently trading at a 37.4% premium to GDT prices while CME futures prices traded at a 12.3% premium to GDT prices from Dec ’19 – Apr ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (May ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Nov 5th event as GDT SMP prices increased to a four and a half year high level. U.S. spot NFDM prices are currently trading at a 12.8% discount to GDT prices while CME futures prices traded at a 12.3% discount to GDT prices from Dec ’19 – Apr ’20. SMP was not sold at the GDT auction for Contract 6 (May ’20).
- The GDT Price Index increased 3.7% at the Nov 5th event, finishing higher for the fourth consecutive event and reaching an 11 auction high, overall.
- Increases in prices within the Nov 5th event were led by skim milk powder, followed by butter milk powder, rennet casein, whole milk powder, anhydrous milkfat and butter. Skim milk powder prices reached a four and a half year high level throughout the Nov 5th event while whole milk powder prices increased to a six month high level. Cheddar cheese prices declined to a nine month low level throughout the Nov 5th event, however.
- Total quantities sold for all products at the Nov 5th event declined slightly from the previous event while finishing 8.8% lower on a YOY basis. Volumes sold for all products within the first auction of November finished 9.4% below last year’s average volumes sold for the month of November but remained 12.0% above three year average seasonal figures.
The GDT Price Index finished 19.9% above previous year price levels at the Nov 5th event, increasing on a YOY basis for the ninth consecutive event. The GDT Price Index also finished 9.8% above the three year average price for the first auction of November, finishing above three year average figures for the 21st consecutive event. The GDT Price Index finished at a six year seasonal high level, overall.
Within the latest auction, increases in prices were led by skim milk powder (+6.7%), followed by butter milk powder (+5.4%), rennet casein (+5.1%), whole milk powder (+3.6%), anhydrous milkfat (+2.6%) and butter (+0.2%). The increases more than offset lower cheddar cheese (-0.6%) and lactose (-1.9%) prices. Sweet whey powder was not sold at the Nov 5th 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 Nov 4th 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 Nov 5th event of 38,681 MT declined slightly from the previous event while finishing 8.8% lower on a YOY basis. The YOY decline in total quantities sold was the fourth experienced in a row.
Volumes sold for all products within the first auction of November declined 0.1% from average October volumes sold while finishing 9.4% below last year’s average volumes sold for the month of November. Nov ’19 volumes sold for all products remained 12.0% above three year average seasonal figures, however.
U.S. butter prices remained at a significant premium to GDT winning prices at the Nov 5th event, despite GDT butter prices increasing from the previous event. U.S. spot butter prices are currently trading at a 13.2% premium to GDT prices while CME futures prices traded at a 15.9% premium to GDT prices from Dec ’19 – May ’20.
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Nov 5th event as GDT cheddar cheese prices declined to a nine month low level. U.S. spot cheddar cheese prices are currently trading at a 37.4% premium to GDT prices while CME futures prices traded at a 12.3% premium to GDT prices from Dec ’19 – Apr ’20. Cheddar cheese was not sold at the GDT auction for Contract 6 (May ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT winning prices at the Nov 5th event as GDT SMP prices increased to a four and a half year high level. U.S. spot NFDM prices are currently trading at a 12.8% discount to GDT prices while CME futures prices traded at a 12.3% discount to GDT prices from Dec ’19 – Apr ’20. SMP was not sold at the GDT auction for Contract 6 (May ’20).