Global Dairy Trade Results Update – 2/6/18
Executive Summary
Dairy product prices increased to a nine auction high during the GDT event held Feb 6th. Highlights from the most recent auction include:
The GDT Price Index also finished higher on a YOY basis for the first time in the past six auctions, finishing 0.7% above previous year price levels at the Feb 6th event. The GDT Price Index finished 23.6% above the three year average price for the first auction of February.
Within the latest auction, increases in prices were led widespread across products offered and led by butter milk powder (+8.4%), followed by butter (+7.9%), whole milk powder (+7.6%), skim milk powder (+7.2%), cheddar cheese (+7.2%), rennet casein (+5.0%) and anhydrous milkfat (+0.5%). Lactose was not offered at the Feb 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 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 Feb 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 Feb 6th event of 22,197 MT declined 4.8% from the previous auction, finishing at a seven month low. Total quantities sold remained higher on a YOY basis for the ninth consecutive event, however.
Volumes sold for all products within the first auction of February declined 8.9% from average January volumes sold but finished 6.3% above last year’s average volumes sold for the month of February. Volume sold for all products within the first auction of February remained 4.3% below the previous three year average February quantities sold, however.
U.S. butter prices finished at a discount to GDT winning prices at the Feb 6th event as GDT butter prices increased to a six auction high. U.S. spot butter prices are currently trading at a 10.9% discount to GDT prices while CME futures prices traded at a 7.1% discount to GDT prices from Mar ’18 – Jul ’18. Butter was not sold at the GDT auction for Contract 6 (Aug ’18). 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 prior to prices converging over the second half of 2016 and into 2017.
U.S. cheddar cheese futures prices also finished at a discount to GDT winning prices at the Feb 6th event as GDT cheddar cheese prices increased to a five auction high. U.S. spot cheddar cheese prices are currently trading at a 19.5% discount to GDT prices while CME futures prices traded at a 9.0% discount to GDT prices from Mar ’18 – Jul ’18. Cheddar cheese was not sold at the GDT auction for Contract 6 (Aug ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Feb 6th event as GDT SMP prices rebounded to a ten auction high. U.S. spot NFDM prices are currently trading at an 18.2% discount to GDT prices while CME futures prices traded at a 14.0% discount to GDT prices from Mar ’18 – Jul ’18. SMP was not sold at the GDT auction for Contract 6 (Aug ’18).
- The GDT Price Index increased for the third consecutive auction during the Feb 6th event, finishing up 5.9% to a nine auction high. The increase in the GDT Price Index was the largest experienced in over a year on a percentage basis.
- Increases in prices within the Feb 6th event were led widespread across products offered and led by butter milk powder, followed by butter, whole milk powder, skim milk powder and cheddar cheese. Whole milk powder prices finished 7.2% above the previous auction, reaching a 17 auction high.
- Total quantities sold for all products at the Feb 6th event declined 4.8% from the previous auction, finishing at a seven month low. Total quantities sold within the first auction of February remained 6.3% above last year’s average volumes sold for the month of February but finished 4.3% below the previous three year average February quantities sold.
The GDT Price Index also finished higher on a YOY basis for the first time in the past six auctions, finishing 0.7% above previous year price levels at the Feb 6th event. The GDT Price Index finished 23.6% above the three year average price for the first auction of February.
Within the latest auction, increases in prices were led widespread across products offered and led by butter milk powder (+8.4%), followed by butter (+7.9%), whole milk powder (+7.6%), skim milk powder (+7.2%), cheddar cheese (+7.2%), rennet casein (+5.0%) and anhydrous milkfat (+0.5%). Lactose was not offered at the Feb 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 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 Feb 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 Feb 6th event of 22,197 MT declined 4.8% from the previous auction, finishing at a seven month low. Total quantities sold remained higher on a YOY basis for the ninth consecutive event, however.
Volumes sold for all products within the first auction of February declined 8.9% from average January volumes sold but finished 6.3% above last year’s average volumes sold for the month of February. Volume sold for all products within the first auction of February remained 4.3% below the previous three year average February quantities sold, however.
U.S. butter prices finished at a discount to GDT winning prices at the Feb 6th event as GDT butter prices increased to a six auction high. U.S. spot butter prices are currently trading at a 10.9% discount to GDT prices while CME futures prices traded at a 7.1% discount to GDT prices from Mar ’18 – Jul ’18. Butter was not sold at the GDT auction for Contract 6 (Aug ’18). 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 prior to prices converging over the second half of 2016 and into 2017.
U.S. cheddar cheese futures prices also finished at a discount to GDT winning prices at the Feb 6th event as GDT cheddar cheese prices increased to a five auction high. U.S. spot cheddar cheese prices are currently trading at a 19.5% discount to GDT prices while CME futures prices traded at a 9.0% discount to GDT prices from Mar ’18 – Jul ’18. Cheddar cheese was not sold at the GDT auction for Contract 6 (Aug ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Feb 6th event as GDT SMP prices rebounded to a ten auction high. U.S. spot NFDM prices are currently trading at an 18.2% discount to GDT prices while CME futures prices traded at a 14.0% discount to GDT prices from Mar ’18 – Jul ’18. SMP was not sold at the GDT auction for Contract 6 (Aug ’18).