Global Dairy Trade Results Update – 10/6/20
Executive Summary
Dairy product prices strengthened during the GDT event held Oct 6th. Highlights from the most recent auction include:
The GDT Price Index remained 4.2% below previous year price levels at the Oct 6th auction, declining on a YOY basis for the 15th time in the past 16 events. The GDT Price Index finished 1.8% below the three year average price for the first auction of October, finishing below three year average figures for the 17th consecutive event.
Within the latest auction, increases in prices were led by butter milk powder (+9.1%), followed by butter (+8.4%), anhydrous milkfat (+5.4%), whole milk powder (+1.7%) and cheddar cheese (+0.4%). The increases more than offset declines in skim milk powder (-0.9%) and lactose (-7.4%) prices. Sweet whey powder was not sold at the Oct 6th 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 Oct 5th 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 Oct 6th event increased 3.8% from the previous event but remained 9.4% lower on a YOY basis. The YOY decline in total quantities sold was the sixth experienced in a row. Total quantities sold typically reach seasonal high levels throughout the months of September, October and November.
Volumes sold for all products within the first auction of October increased 1.1% from average September volumes sold but remained 9.4% below last year’s average volumes sold for the month of October. Volumes sold for all products finished 10.4% below three year average seasonal figures, declining to a four year low seasonal level, overall.
U.S. butter prices remained at a premium to GDT winning prices at the Oct 6th event, despite GDT butter prices rebounding from the previous month’s four year low level. U.S. spot butter prices are currently trading at a 6.1% discount to GDT prices however CME futures prices traded at a 3.9% premium to GDT prices from Nov ’20 – Mar ’21. Butter was not sold at the GDT auction for Contract 6 (Apr ’21).
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Oct 6th event, despite GDT cheddar cheese prices rebounding to a two month high level. U.S. spot cheddar cheese prices are currently trading at a 38.1% premium to GDT prices while CME futures prices traded at a 9.1% premium to GDT prices from Nov ’20 – Apr ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Oct 6th event, despite GDT SMP prices declining from the seven month high level experienced throughout the previous auction. U.S. spot NFDM prices are currently trading at a 15.5% discount to GDT SMP prices while CME futures prices traded at a 15.6% discount to GDT SMP prices from Nov ’20 – Mar ’21. SMP was not sold at the GDT auction for Contract 6 (Apr ’21).
- The GDT Price Index increased 2.2% at the Oct 6th event, finishing higher for the second consecutive event.
- Increases in prices within the Oct 6th event were widespread across products sold with the exception of skim milk powder and lactose. Skim milk powder prices declined from the seven month high level experienced throughout the previous event. Whole milk powder and cheddar cheese prices each increased to two month high levels while butter prices rebounded from the four year low level experienced throughout the previous event.
- Total quantities sold for all products at the Oct 6th event remained lower on a YOY basis for the sixth consecutive auction, finishing down 9.4%.
The GDT Price Index remained 4.2% below previous year price levels at the Oct 6th auction, declining on a YOY basis for the 15th time in the past 16 events. The GDT Price Index finished 1.8% below the three year average price for the first auction of October, finishing below three year average figures for the 17th consecutive event.
Within the latest auction, increases in prices were led by butter milk powder (+9.1%), followed by butter (+8.4%), anhydrous milkfat (+5.4%), whole milk powder (+1.7%) and cheddar cheese (+0.4%). The increases more than offset declines in skim milk powder (-0.9%) and lactose (-7.4%) prices. Sweet whey powder was not sold at the Oct 6th 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 Oct 5th 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 Oct 6th event increased 3.8% from the previous event but remained 9.4% lower on a YOY basis. The YOY decline in total quantities sold was the sixth experienced in a row. Total quantities sold typically reach seasonal high levels throughout the months of September, October and November.
Volumes sold for all products within the first auction of October increased 1.1% from average September volumes sold but remained 9.4% below last year’s average volumes sold for the month of October. Volumes sold for all products finished 10.4% below three year average seasonal figures, declining to a four year low seasonal level, overall.
U.S. butter prices remained at a premium to GDT winning prices at the Oct 6th event, despite GDT butter prices rebounding from the previous month’s four year low level. U.S. spot butter prices are currently trading at a 6.1% discount to GDT prices however CME futures prices traded at a 3.9% premium to GDT prices from Nov ’20 – Mar ’21. Butter was not sold at the GDT auction for Contract 6 (Apr ’21).
U.S. cheddar cheese prices also remained at a premium to GDT winning prices at the Oct 6th event, despite GDT cheddar cheese prices rebounding to a two month high level. U.S. spot cheddar cheese prices are currently trading at a 38.1% premium to GDT prices while CME futures prices traded at a 9.1% premium to GDT prices from Nov ’20 – Apr ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Oct 6th event, despite GDT SMP prices declining from the seven month high level experienced throughout the previous auction. U.S. spot NFDM prices are currently trading at a 15.5% discount to GDT SMP prices while CME futures prices traded at a 15.6% discount to GDT SMP prices from Nov ’20 – Mar ’21. SMP was not sold at the GDT auction for Contract 6 (Apr ’21).