Global Dairy Trade Results Update – 7/19/16
Executive Summary
Overall, dairy product prices were unchanged during the GDT event held Jul 19th. Highlights from the most recent auction include:
• The GDT Price Index finished flat at the Jul 19th event, remaining slightly below the ten auction high experienced during the final auction of June.
• Butter and lactose prices declined most significantly at the Jul 19th event however declines were largely offset by a 1.9% increase in whole milk powder prices.
• Total quantities sold for all products at the Jul 19th event declined slightly from the eight month high experienced during the previous event, finishing 1.1% below the previous year volumes.
Additional Report Details
Dairy product prices were unchanged within the Global Dairy Trade (GDT) during the auction held Jul 19th, finishing flat for the second time in the past three events. The GDT Price Index had declined to a 14 auction low during mid-March but rebounded to a ten auction high during the second auction of June, prior to declining slightly in total throughout the July events. The GDT Price Index represents a weighted-average of the percentage changes in prices between trading events for all products offered.
The GDT Price Index finished 22.6% above the previous year price levels at the Jul 19th event but remained 29.9% below the three year average price for the second auction of July. The GDT Price Index had finished lower on a YOY basis for 14 consecutive auctions prior to increasing throughout the June and July events.
Within the latest auction, price declines were led by butter (-5.0%), followed by lactose (-4.0%), cheddar cheese (-1.1%), skim milk powder (-1.1%) and butter milk powder (-0.5%). The aforementioned declines were offset by increases in prices experienced within anhydrous milkfat (+0.2%), rennet casein (+0.4%) and whole milk powder (+1.9%).
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 SMP has been adjusted to 35% protein content (equivalent to U.S. NFDM) in the $/lb columns below. CME spot and average futures prices are based on Jul 18th 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 Jul 19th event of 31,348 MT were 3.5% below the eight month high experienced during the previous auction and 1.1% below the previous year volumes.
Volumes sold for all products within the July auctions were 1.6% below last year’s average volumes sold for the month of July and 12.9% below the previous three year average July quantities sold.
U.S. butter prices continue to remain at a significant premium to GDT winning prices through the Jul 19th event. U.S. spot butter prices are currently trading at a 92.8% premium to GDT prices while CME futures prices are trading at an 89.2% premium to GDT prices from Aug ’16 – Jan ’17. U.S. butter prices traded at an 83.3% premium to GDT butter prices over the second half of 2014 and a 53.9% premium to GDT butter prices throughout 2015.
U.S. cheddar cheese prices also continue to remain at a premium to GDT winning prices. U.S. spot cheddar cheese prices are currently trading at a 33.3% premium to GDT prices while CME futures prices are trading at a 33.9% premium to GDT prices from Sep ’16 – Nov ’16. Cheddar cheese was not sold at the GDT auction for Contract 1 (Aug ’16), Contract 5 (Dec ’16) and Contract 6 (Jan ’17).
U.S. NFDM spot prices are currently trading 3.3% below GDT SMP prices however U.S. NFDM prices are expected to regain a premium to GDT SMP prices during future months, as U.S. prices are trading at an 11.3% average premium to GDT prices from Aug ’16 – Jan ’17.
The GDT Price Index finished 22.6% above the previous year price levels at the Jul 19th event but remained 29.9% below the three year average price for the second auction of July. The GDT Price Index had finished lower on a YOY basis for 14 consecutive auctions prior to increasing throughout the June and July events.
Within the latest auction, price declines were led by butter (-5.0%), followed by lactose (-4.0%), cheddar cheese (-1.1%), skim milk powder (-1.1%) and butter milk powder (-0.5%). The aforementioned declines were offset by increases in prices experienced within anhydrous milkfat (+0.2%), rennet casein (+0.4%) and whole milk powder (+1.9%).
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 SMP has been adjusted to 35% protein content (equivalent to U.S. NFDM) in the $/lb columns below. CME spot and average futures prices are based on Jul 18th 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 Jul 19th event of 31,348 MT were 3.5% below the eight month high experienced during the previous auction and 1.1% below the previous year volumes.
Volumes sold for all products within the July auctions were 1.6% below last year’s average volumes sold for the month of July and 12.9% below the previous three year average July quantities sold.
U.S. butter prices continue to remain at a significant premium to GDT winning prices through the Jul 19th event. U.S. spot butter prices are currently trading at a 92.8% premium to GDT prices while CME futures prices are trading at an 89.2% premium to GDT prices from Aug ’16 – Jan ’17. U.S. butter prices traded at an 83.3% premium to GDT butter prices over the second half of 2014 and a 53.9% premium to GDT butter prices throughout 2015.
U.S. cheddar cheese prices also continue to remain at a premium to GDT winning prices. U.S. spot cheddar cheese prices are currently trading at a 33.3% premium to GDT prices while CME futures prices are trading at a 33.9% premium to GDT prices from Sep ’16 – Nov ’16. Cheddar cheese was not sold at the GDT auction for Contract 1 (Aug ’16), Contract 5 (Dec ’16) and Contract 6 (Jan ’17).
U.S. NFDM spot prices are currently trading 3.3% below GDT SMP prices however U.S. NFDM prices are expected to regain a premium to GDT SMP prices during future months, as U.S. prices are trading at an 11.3% average premium to GDT prices from Aug ’16 – Jan ’17.