Global Dairy Trade Results Update – 4/7/20
Executive Summary
Dairy product prices rebounded during the GDT event held Apr 7th. Highlights from the most recent auction include:
The GDT Price Index remained 12.8% below previous year price levels at the Apr 7th auction, however, declining on a YOY basis for the fourth consecutive event. The GDT Price Index finished 8.8% below the three year average price for the first auction of April, finishing below three year average figures for the fifth consecutive event.
Within the latest auction, increases in prices were led by butter (+4.5%), followed by lactose (+4.4%), whole milk powder (+2.1%), anhydrous milkfat (+0.4%) and cheddar cheese (+0.2%). The increases more than offset declines in skim milk powder (-0.8%), rennet casein (-2.6%) and butter milk powder (-11.9%) prices. Sweet whey powder was not sold at the Apr 7th 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 Apr 6th 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 Apr 7th event declined 16.1% from the previous event but remained 13.7% higher on a YOY basis. The YOY increase in total quantities sold was the seventh experienced in a row.
Volumes sold for all products within the first auction of April declined 18.4% from average March volumes sold but finished 19.4% above last year’s average volumes sold for the month of April. Apr ’20 volumes sold for all products finished 4.9% above three year average seasonal figures, reaching a three year seasonal high level.
U.S. butter prices finished at a significant discount to GDT winning prices at the Apr 7th event as GDT butter prices rebounded to an eight month high level. U.S. spot butter prices are currently trading at a 33.5% discount to GDT prices while CME futures prices traded at a 21.0% discount to GDT prices from Jun ’20 – Oct ’20. Butter was not sold at the GDT auction for Contract 1 (May ’20).
U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Apr 7th event as GDT cheddar cheese prices rebounded slightly from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 44.4% discount to GDT prices while CME futures prices traded at a 25.7% discount to GDT prices from May ’20 – Sep ’20. Cheddar cheese was not sold at the GDT auction for Contract 4 (Aug ’20) and Contract 6 (Oct ’20).
U.S. nonfat dry milk (NFDM) futures prices also remained at a discount to GDT SMP winning prices at the Apr 7th event, despite GDT SMP prices declining to a seven month low level. U.S. spot NFDM prices are currently trading at a 26.5% discount to GDT SMP prices while CME futures prices traded at a 25.8% discount to GDT SMP prices from May ’20 – Sep ’20. SMP was not sold at the GDT auction for Contract 6 (Oct ’20).
- The GDT Price Index increased 1.2% at the Apr 7th event, rebounding from the 14 month low level experienced throughout the previous auction. The GDT Price Index remained lower on a YOY basis for the fourth consecutive event, however, finishing down 12.8%.
- Increases in prices within the Apr 7th event were led by butter, followed by lactose, whole milk powder, anhydrous milkfat and cheddar cheese. Butter prices increased to an eight month high level throughout the Apr 7th event while whole milk powder prices rebounded from the 14 month low level experienced throughout the previous event. Skim milk powder, rennet casein and butter milk powder prices declined from the previous event. Skim milk powder prices reached a seven month low level.
- Total quantities sold for all products at the Apr 7th event declined seasonally from the previous event but remained higher on a YOY basis for the seventh consecutive event. Volumes sold for all products within the first auction of April finished 19.4% above last year’s average volumes sold for the month of April and 4.9% above three year average seasonal figures, reaching a three year high seasonal level, overall.
The GDT Price Index remained 12.8% below previous year price levels at the Apr 7th auction, however, declining on a YOY basis for the fourth consecutive event. The GDT Price Index finished 8.8% below the three year average price for the first auction of April, finishing below three year average figures for the fifth consecutive event.
Within the latest auction, increases in prices were led by butter (+4.5%), followed by lactose (+4.4%), whole milk powder (+2.1%), anhydrous milkfat (+0.4%) and cheddar cheese (+0.2%). The increases more than offset declines in skim milk powder (-0.8%), rennet casein (-2.6%) and butter milk powder (-11.9%) prices. Sweet whey powder was not sold at the Apr 7th 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 Apr 6th 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 Apr 7th event declined 16.1% from the previous event but remained 13.7% higher on a YOY basis. The YOY increase in total quantities sold was the seventh experienced in a row.
Volumes sold for all products within the first auction of April declined 18.4% from average March volumes sold but finished 19.4% above last year’s average volumes sold for the month of April. Apr ’20 volumes sold for all products finished 4.9% above three year average seasonal figures, reaching a three year seasonal high level.
U.S. butter prices finished at a significant discount to GDT winning prices at the Apr 7th event as GDT butter prices rebounded to an eight month high level. U.S. spot butter prices are currently trading at a 33.5% discount to GDT prices while CME futures prices traded at a 21.0% discount to GDT prices from Jun ’20 – Oct ’20. Butter was not sold at the GDT auction for Contract 1 (May ’20).
U.S. cheddar cheese prices remained at a discount to GDT winning prices at the Apr 7th event as GDT cheddar cheese prices rebounded slightly from the previous auction. U.S. spot cheddar cheese prices are currently trading at a 44.4% discount to GDT prices while CME futures prices traded at a 25.7% discount to GDT prices from May ’20 – Sep ’20. Cheddar cheese was not sold at the GDT auction for Contract 4 (Aug ’20) and Contract 6 (Oct ’20).
U.S. nonfat dry milk (NFDM) futures prices also remained at a discount to GDT SMP winning prices at the Apr 7th event, despite GDT SMP prices declining to a seven month low level. U.S. spot NFDM prices are currently trading at a 26.5% discount to GDT SMP prices while CME futures prices traded at a 25.8% discount to GDT SMP prices from May ’20 – Sep ’20. SMP was not sold at the GDT auction for Contract 6 (Oct ’20).