Global Dairy Trade Results Update – 7/7/20
Executive Summary
Dairy product prices continued to increase during the GDT event held Jul 7th. Highlights from the most recent auction include:
The GDT Price Index finished 0.2% above previous year price levels at the Jul 7th auction, increasing on a YOY basis for the first time in the past ten events. The GDT Price Index remained 2.3% below the three year average price for the first auction of July, however, finishing below three year average figures for the 11th consecutive event.
Within the latest auction, increases in prices were led by whole milk powder (+14.0%), followed by butter milk powder (+3.8%), skim milk powder (+3.5%), cheddar cheese (+3.3%), butter (+3.0%) and lactose (+1.9%). The increases more than offset a decline in anhydrous milkfat (-0.2%) prices. Sweet whey powder was not sold at the Jul 7th 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 Jul 6th 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 7th event rebounded 20.0% from the previous event while finishing 4.0% higher on a YOY basis. The YOY increase in total quantities sold was the 12th experienced throughout the past 13 auctions. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout next several months.
Volumes sold for all products within the first auction of July increased 18.4% from average June volumes sold while finishing 3.3% above last year’s average volumes sold for the month of July. Jul ’20 volumes sold for all products remained 1.8% below three year average seasonal figures, however.
U.S. butter prices remained at a premium to GDT winning prices at the Jul 7th event, despite GDT butter prices rebounding from the previous auction’s three and a half year low level. U.S. spot butter prices are currently trading at a 6.1% premium to GDT prices while CME futures prices traded at a 15.9% premium to GDT prices from Aug ’20 – Jan ’21.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Jul 7th event, despite GDT cheddar cheese prices continuing to rebound from the 16 month low level experienced throughout the first auction of June. U.S. spot cheddar cheese prices are currently trading at a 48.6% premium to GDT prices while CME futures prices traded at a 10.7% premium to GDT prices from Aug ’20 – Jan ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Jul 7th event, as GDT SMP prices rebounded to a four month high level. U.S. spot NFDM prices are currently trading at a 19.5% discount to GDT SMP prices while CME futures prices traded at a 10.0% discount to GDT SMP prices from Sep ’20 – Dec ’20. SMP was not sold at the GDT auction for Contract 1 (Aug ’20) and Contract 6 (Jan ’21).
- The GDT Price Index increased 8.3% at the Jul 7th event, finishing higher for the fourth consecutive event and reaching a five month high level. The increase in the GDT Price Index was the largest experienced throughout the past three and a half years.
- Increases in prices within the Jul 7th event were widespread across products offered with the exception of anhydrous milkfat and led by whole milk powder. Whole milk powder prices increased to a five month high level throughout the Jul 7th event while skim milk powder prices reached a four month high. Butter prices rebounded off of the three and a half year low level experienced throughout the previous event while cheddar cheese prices continued to rebound from the 16 month low level experienced throughout the first auction of June.
- Total quantities sold for all products at the Jul 7th event increased seasonally from the previous auction while finishing 4.0% higher on a YOY basis. The YOY increase in total quantities sold was the 12th experienced throughout the past 13 auctions.
The GDT Price Index finished 0.2% above previous year price levels at the Jul 7th auction, increasing on a YOY basis for the first time in the past ten events. The GDT Price Index remained 2.3% below the three year average price for the first auction of July, however, finishing below three year average figures for the 11th consecutive event.
Within the latest auction, increases in prices were led by whole milk powder (+14.0%), followed by butter milk powder (+3.8%), skim milk powder (+3.5%), cheddar cheese (+3.3%), butter (+3.0%) and lactose (+1.9%). The increases more than offset a decline in anhydrous milkfat (-0.2%) prices. Sweet whey powder was not sold at the Jul 7th 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 Jul 6th 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 7th event rebounded 20.0% from the previous event while finishing 4.0% higher on a YOY basis. The YOY increase in total quantities sold was the 12th experienced throughout the past 13 auctions. Total quantities sold typically reach seasonal low levels throughout the months of April and May, prior to rebounding seasonally throughout next several months.
Volumes sold for all products within the first auction of July increased 18.4% from average June volumes sold while finishing 3.3% above last year’s average volumes sold for the month of July. Jul ’20 volumes sold for all products remained 1.8% below three year average seasonal figures, however.
U.S. butter prices remained at a premium to GDT winning prices at the Jul 7th event, despite GDT butter prices rebounding from the previous auction’s three and a half year low level. U.S. spot butter prices are currently trading at a 6.1% premium to GDT prices while CME futures prices traded at a 15.9% premium to GDT prices from Aug ’20 – Jan ’21.
U.S. cheddar cheese prices also finished at a premium to GDT winning prices at the Jul 7th event, despite GDT cheddar cheese prices continuing to rebound from the 16 month low level experienced throughout the first auction of June. U.S. spot cheddar cheese prices are currently trading at a 48.6% premium to GDT prices while CME futures prices traded at a 10.7% premium to GDT prices from Aug ’20 – Jan ’21.
U.S. nonfat dry milk (NFDM) futures prices remained at a discount to GDT SMP winning prices at the Jul 7th event, as GDT SMP prices rebounded to a four month high level. U.S. spot NFDM prices are currently trading at a 19.5% discount to GDT SMP prices while CME futures prices traded at a 10.0% discount to GDT SMP prices from Sep ’20 – Dec ’20. SMP was not sold at the GDT auction for Contract 1 (Aug ’20) and Contract 6 (Jan ’21).