Global Dairy Trade Results Update – 12/6/16
Executive Summary
Dairy product prices continued to increase during the GDT event held Dec 6th. Highlights from the most recent auction include:
The GDT Price Index finished 50.9% above the previous year price levels at the Dec 6th event and 11.2% above the three year average price for the first auction of December. The GDT Price Index has increased on a YOY basis throughout the past 13 events.
Within the latest auction, price gains were widespread and led by lactose (+10.6%), followed by whole milk powder (+4.9%), anhydrous milkfat (+2.9%), rennet casein (+2.3%), cheddar cheese (+2.2%), butter (+1.7%) and skim milk powder (+1.4%). Butter milk powder (-2.6%) was the only product to decline at the Dec 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 Dec 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 Dec 6th event of 22,472 MT finished 6.0% below the previous auction, reaching a six month low. GDT quantities sold typically reach seasonal highs throughout the months of August and September prior to declining over the following several months.
Volumes sold for all products within the first auction of December finished 15.3% below last year’s average volumes sold for the month of December and 40.7% below the previous three year average December quantities sold.
U.S. butter prices continue to remain at a premium to GDT winning prices through the Dec 6th event, despite GDT butter prices increasing by over 50% throughout the past four months. U.S. spot butter prices are currently trading at a 12.0% premium to GDT prices while CME futures prices are trading at a 13.5% premium to GDT prices from Jan ’17 – Jun ’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 futures prices also continue to remain at a slight premium to GDT winning prices, despite GDT cheddar cheese prices reaching a new two year high at the Dec 6th event. U.S. spot cheddar cheese prices are currently trading 6.0% below GDT prices however CME futures prices are trading at a 2.4% premium to GDT prices from Jan ’17 – May ’17. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jun ’17).
U.S. NFDM spot prices are currently trading 17.5% below GDT prices as GDT SMP prices continue to increase, reaching a new 20 month high at the Dec 6th event. U.S. NFDM prices are expected to remain at a discount to GDT SMP prices throughout future months, as GDT prices are trading at a 9.5% average premium to U.S. prices from Jan ’17 – Jun ’17.
- The GDT Price Index increased 3.5% at the Dec 6th event, finishing higher for the eighth time in the past nine auctions and reaching a new two year high.
- Increases in prices at the Dec 6th event were widespread and led by lactose, followed by whole milk powder. Butter milk powder experienced the only decline in prices at the Dec 6th event.
- Total quantities sold for all products at the Dec 6th event declined 6.0% from the previous auction, reaching a six month low. Total quantities sold at the Dec 6th event finished 15.3% below last year’s average volumes sold for the month of December.
The GDT Price Index finished 50.9% above the previous year price levels at the Dec 6th event and 11.2% above the three year average price for the first auction of December. The GDT Price Index has increased on a YOY basis throughout the past 13 events.
Within the latest auction, price gains were widespread and led by lactose (+10.6%), followed by whole milk powder (+4.9%), anhydrous milkfat (+2.9%), rennet casein (+2.3%), cheddar cheese (+2.2%), butter (+1.7%) and skim milk powder (+1.4%). Butter milk powder (-2.6%) was the only product to decline at the Dec 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 Dec 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 Dec 6th event of 22,472 MT finished 6.0% below the previous auction, reaching a six month low. GDT quantities sold typically reach seasonal highs throughout the months of August and September prior to declining over the following several months.
Volumes sold for all products within the first auction of December finished 15.3% below last year’s average volumes sold for the month of December and 40.7% below the previous three year average December quantities sold.
U.S. butter prices continue to remain at a premium to GDT winning prices through the Dec 6th event, despite GDT butter prices increasing by over 50% throughout the past four months. U.S. spot butter prices are currently trading at a 12.0% premium to GDT prices while CME futures prices are trading at a 13.5% premium to GDT prices from Jan ’17 – Jun ’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 futures prices also continue to remain at a slight premium to GDT winning prices, despite GDT cheddar cheese prices reaching a new two year high at the Dec 6th event. U.S. spot cheddar cheese prices are currently trading 6.0% below GDT prices however CME futures prices are trading at a 2.4% premium to GDT prices from Jan ’17 – May ’17. Cheddar cheese was not sold at the GDT auction for Contract 6 (Jun ’17).
U.S. NFDM spot prices are currently trading 17.5% below GDT prices as GDT SMP prices continue to increase, reaching a new 20 month high at the Dec 6th event. U.S. NFDM prices are expected to remain at a discount to GDT SMP prices throughout future months, as GDT prices are trading at a 9.5% average premium to U.S. prices from Jan ’17 – Jun ’17.