Skip to content
800-884-8290

|

Client Login

|

Open an Account
  • About Us
  • Services
    • Futures & Options Brokerage
    • Organic Grain Swaps
    • Margin Management
    • Commodity Marketing Education
    • Consulting & Insurance
  • Research
    • Dairy
    • Livestock
    • Grain & Oilseeds
    • Ethanol & Biodiesel
  • Account
  • Quotes
  • Contact Us

Global Dairy Trade Results Update – GDT Price Index…

  • July 16, 2014
  • by wbabler
Dairy product prices continued their recent declines at the Global Dairy Trade (GDT) auction held July 15th. The GDT Price Index declined 8.9% on the session, the tenth decline in the last eleven auctions and the largest decline since April ’12. The GDT Price Index represents a weighted-average of the percentage changes in prices between trading events for all products offered. GDT Price Index - Jul The GDT Price Index began the year up 47.7% YOY but has declined of late, regressing to levels below the three year average prices. The July 15th event finished 33.2% below last year and 12.9% below the three year average GDT Price Index for the second week of July. Total quantity sold for all products was down 11.7% from last event, with the majority of the decline due to less product being made available to bidders. Maximum supply, a measure of the upper bound of the quantities sellers wish to sell in the trading event, declined 11.0%, from 43,249 MT to 38,483 MT. Price declines were experienced across all products offered at the event. Whole milk powder (WMP), which accounted for over half of the GDT volume sold in 2013, fell 10.9%, anhydrous milk fat (AMF) fell 10.0% and skim milk powder (SMP) fell 7.1%. Butter, butter milk powder, cheddar cheese and rennet casein also experienced price declines at the July 15th event. GDT Price Index2 - Jul Butter and cheddar cheese prices declined 1.1% and 1.6%, respectively from the previous bi-weekly auction. See the table below for a summary of the most recent GDT auction results 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 July 14th figures. CME average futures prices are weighted average prices based on the percentage of the total quantity sold in each GDT contract period. GDT Auction Results 7-15-14 Within the GDT auction, butter offered by U.S. sellers for short-term contract periods, representing product sold by Dairy America, has recently traded at a premium to butter offered by Oceania sellers for short-term contract periods, representing product sold by Fonterra. July ’14 U.S. / Oceania butter price premiums within the GDT auction were the highest ever experienced. Fonterra butter was first offered on GDT in Feb ’13, with Dairy America butter being first offered in Jul ’13. GDT Butter Prices (Short-Term Contracts) - Jul GDT winning prices in butter have been historically higher than U.S. butter prices until the recent run-up in domestic butter prices. Over the past 26 bi-weekly events leading up to April ’14, GDT butter prices have traded at a $0.20 premium to U.S. butter prices. Over the past six auctions, U.S. butter prices have traded at a $0.51 premium to GDT butter prices, with the most recent event’s $0.89 premium being the highest over the period. Due to freight charges, duties and differences in protein standards, butter is rarely imported domestically and is not expected to in the near future despite the recent divergence in international prices. GDT future month winning prices remain lower than CME futures prices, with Aug ’14 – Dec ’14 GDT butter trading at an average 34.1% discount to CME futures prices and a 44.3% discount from Sep ’14 – Dec ‘14. The relatively high Aug ’14 GDT price was due to Dairy America selling Contract 1 butter, with Fonterra selling the rest of the forward month contracts. Butter was not sold at the GDT auction for Contract 6 (Jan ’15). GDT butter prices have traded at a 31.7% discount to U.S. butter prices since April ’14. Butter Prices - Jul Note: The relatively high Aug ’14 GDT price was due to Dairy America selling Contract 1 butter, with Fonterra selling the rest of the forward month contracts. Cheddar cheese available for purchase at GDT auctions is currently offered only by Fonterra, so GDT winning prices in cheddar cheese is a viable metric for Oceania prices. GDT prices have traded at a premium to U.S. prices until recently, with U.S. prices outpacing GDT prices since Feb ’14. CME futures prices are also trading above GDT prices in the majority of future months. Cheddar cheese was not sold at the GDT auction for Contact 1 (Aug ’14), Contract 5 (Dec ’14) and Contract 6 (Jan ’15). Cheddar Cheese Prices - Jul GDT SMP prices have seen recent convergence, with U.S., Oceania, Europe and India prices moving downward in tandem. U.S., Oceania and Europe GDT SMP prices on short-term contracts have traded within 5% of each other in every event since April prior to the July 15th event where U.S. prices strengthened slightly relative to Oceania and Europe prices. India SMP, representing product sold by Amul, was not sold for Contract 1 and Contract 2 periods since the first week of May. GDT SMP Prices (Short-Term Contracts) - Jul Within the GDT auction, SMP offered by U.S. sellers on short-term contracts, representing product sold by Dairy America and Land O’Lakes, has recently traded at a premium to SMP offered by Oceania sellers on short-term contracts, representing product sold by Fonterra. Recent U.S. / Oceania SMP price premiums within the GDT auction have been the highest since September 2012. The gain in U.S. SMP prices relative to Oceania SMP prices within the GDT auction is due to a more severe decline in Oceania SMP prices in recent months. Overall, the GDT SMP Price Index fell 15.4% since the first of April, with Oceania short-term contracts falling 19.7% during the same period. GDT SMP Prices (Short-Term Contracts)2 - Jul The recent run-up in domestic SMP/NFDM prices relative to GDT SMP prices is expected to be short-lived, with the average CME futures prices trading at a slight discount to the average GDT future month winning prices. Nov ’14 – Jan ’15 GDT SMP is trading at an average 3.5% premium to CME NFDM futures prices when using a 35% normalized protein content. SMP-NFDM Prices - Jul
2014 U.S. Milk Production Projections Lowered – Jul ’14
May New Zealand Milk Production Up 24.0% YOY – Jul ’14
Dairy
Ethanol
Livestock
Grain

Recent Dairy Research

  • Food Service Sales Update – Dec ’22
  • Global Dairy Trade Update 11-15-22
  • Dairy Products Production – Jul ’29
  • USDA Semi-Annual EU Dairy Production Report
  • U.S. Dairy Cold Storage Update – May ’22
Atten Babler Commodities LLC
11406 US Route 20 W
Galena, IL 61036
800-884-8290
Privacy Policy
Futures, options and swaps brokerage is provided through Atten Babler Commodities LLC. The risk of loss in trading commodity futures and options and swaps is substantial. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act. Before trading, you should carefully consider your financial position to determine if futures, options or swaps trading is appropriate. When trading futures, options or swaps, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. Atten Babler Commodities LLC use sources that they believe to be reliable, but they cannot warrant the accuracy of any of the data included in this site. Opinions and market data are subject to change at any time. Unless otherwise stated the information contained herein is meant for informational purposes only and is not a solicitation to buy futures or options or swaps.
© Copyright 2023 Atten Babler Commodities LLC