Global Dairy Trade Results Update – 6/2/20
Executive Summary
Dairy product prices increased slightly during the GDT event held Jun 2nd. Highlights from the most recent auction include:
The GDT Price Index remained 13.0% below previous year price levels at the Jun 2nd auction, declining on a YOY basis for the eighth consecutive event. The GDT Price Index finished 14.8% below the three year average price for the first auction of June, finishing below three year average figures for the ninth consecutive event.
Within the latest auction, increases in prices were led by butter milk powder (+9.4%), followed by whole milk powder (+2.1%). The increases more than offset declines in skim milk powder (-0.5%), anhydrous milkfat (-2.9%), lactose (-4.1%), butter (-4.4%) and cheddar cheese (-5.3%) prices. Sweet whey powder was not sold at the Jun 2nd event while Fonterra ceased selling rennet casein at GDT events following the May 19th event, noting stronger demand through other sales channels.
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 Jun 1st 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 Jun 2nd event increased 30.9% from the previous event while finishing 10.5% higher on a YOY basis. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout the month of June. Total quantities sold have finished higher on a YOY basis over 11 consecutive auctions through the Jun 2nd event.
Volumes sold for all products within the first auction of June increased 32.2% from average May volumes sold but finished 0.4% below last year’s average volumes sold for the month of June. Jun ’20 volumes sold for all products remained 1.0% above three year average seasonal figures, however.
U.S. butter prices remained at a premium to GDT winning prices at the Jun 2nd event as GDT butter prices declined to a three and a half year low level. U.S. spot butter prices are currently trading at a 3.6% premium to GDT prices however CME futures prices traded at a 15.4% premium to GDT prices from Jul ’20 – Dec ’20.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Jun 2nd event as GDT cheddar cheese prices declined to a 16 month low level. U.S. spot cheddar cheese prices are currently trading at a 40.9% premium to GDT prices while CME futures prices traded at a 5.9% premium to GDT prices from Jul ’20 – Dec ’20. Cheddar cheese was not sold at the GDT auction for Contract 2 (Aug ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Jun 2nd event, despite GDT SMP prices declining from the two month high level experienced throughout the previous auction. U.S. spot NFDM prices are currently trading at a 13.2% discount to GDT SMP prices while CME futures prices traded at a 6.1% discount to GDT SMP prices from Jul ’20 – Nov ’20. SMP was not sold at the GDT auction for Contract 6 (Dec ’20).
- The GDT Price Index increased 0.1% at the Jun 2nd event, finishing higher for the second consecutive event.
- Increases in prices within the Jun 2nd event were led by butter milk powder, followed by whole milk powder, which increased to a two month high level. Butter and anhydrous milkfat prices each declined to three and a half year low levels throughout the Jun 2nd event, however, while cheddar cheese prices declined to a 16 month low level. Skim milk powder prices declined slightly from the two month high level experienced throughout the previous event.
- Total quantities sold for all products at the Jun 2nd event increased seasonally while remaining higher on a YOY basis for the 11th consecutive event, finishing up 10.5%.
The GDT Price Index remained 13.0% below previous year price levels at the Jun 2nd auction, declining on a YOY basis for the eighth consecutive event. The GDT Price Index finished 14.8% below the three year average price for the first auction of June, finishing below three year average figures for the ninth consecutive event.
Within the latest auction, increases in prices were led by butter milk powder (+9.4%), followed by whole milk powder (+2.1%). The increases more than offset declines in skim milk powder (-0.5%), anhydrous milkfat (-2.9%), lactose (-4.1%), butter (-4.4%) and cheddar cheese (-5.3%) prices. Sweet whey powder was not sold at the Jun 2nd event while Fonterra ceased selling rennet casein at GDT events following the May 19th event, noting stronger demand through other sales channels.
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 Jun 1st 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 Jun 2nd event increased 30.9% from the previous event while finishing 10.5% higher on a YOY basis. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout the month of June. Total quantities sold have finished higher on a YOY basis over 11 consecutive auctions through the Jun 2nd event.
Volumes sold for all products within the first auction of June increased 32.2% from average May volumes sold but finished 0.4% below last year’s average volumes sold for the month of June. Jun ’20 volumes sold for all products remained 1.0% above three year average seasonal figures, however.
U.S. butter prices remained at a premium to GDT winning prices at the Jun 2nd event as GDT butter prices declined to a three and a half year low level. U.S. spot butter prices are currently trading at a 3.6% premium to GDT prices however CME futures prices traded at a 15.4% premium to GDT prices from Jul ’20 – Dec ’20.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Jun 2nd event as GDT cheddar cheese prices declined to a 16 month low level. U.S. spot cheddar cheese prices are currently trading at a 40.9% premium to GDT prices while CME futures prices traded at a 5.9% premium to GDT prices from Jul ’20 – Dec ’20. Cheddar cheese was not sold at the GDT auction for Contract 2 (Aug ’20).
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Jun 2nd event, despite GDT SMP prices declining from the two month high level experienced throughout the previous auction. U.S. spot NFDM prices are currently trading at a 13.2% discount to GDT SMP prices while CME futures prices traded at a 6.1% discount to GDT SMP prices from Jul ’20 – Nov ’20. SMP was not sold at the GDT auction for Contract 6 (Dec ’20).