Global Dairy Trade Results Update – 6/5/18
Executive Summary
Dairy product prices declined during the GDT event held Jun 5th. Highlights from the most recent auction include:
The GDT Price Index also remained lower on a YOY basis for the third consecutive event, finishing 3.9% below previous year price levels at the Jun 5th event. The GDT Price Index remained 27.6% above the three year average price for the first auction of June, however.
Within the latest auction, declines in prices were led by cheddar cheese (-3.6%), followed by butter (-3.5%), anhydrous milkfat (-1.7%) and whole milk powder (-1.1%). The declines more than offset increases in skim milk powder (+0.3%), rennet casein (+2.7%), lactose (+3.9%) and butter milk powder (+17.7%) prices. Sweet whey powder was not offered at the Jun 5th 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 Jun 4th 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 Jun 5th event of 21,580 MT increased 18.8% from the previous event, finishing at an eight auction high. Total quantities sold remained slightly lower on a YOY basis for the eighth consecutive auction, however.
Volumes sold for all products within the first auction of June increased 14.6% from average May volumes sold but remained 0.1% below last year’s average volumes sold for the month of June. Volume sold for all products within the first auction of June finished 8.9% below the previous three year average June quantities sold.
U.S. butter prices finished at a slight discount to GDT winning prices at the Jun 5th event despite GDT butter prices declining to a four auction low. U.S. spot butter prices are currently trading at a 3.7% discount to GDT prices while CME futures prices traded at a 1.5% discount to GDT prices from Jul ’18 – Nov ’18. Butter was not sold at the GDT auction for Contract 6 (Dec ’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 Jun 5th event, despite GDT cheddar cheese prices declining to a three auction low. U.S. spot cheddar cheese prices are currently trading at a 16.2% discount to GDT prices while CME futures prices traded at a 5.5% discount to GDT prices from Jul ’18 – Nov ’18. Cheddar cheese was not sold at the GDT auction for Contract 2 (Aug ’18) and Contract 6 (Dec ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Jun 5th event, as GDT SMP prices increased to a six auction high. U.S. spot NFDM prices are currently trading at a 14.9% discount to GDT prices while CME futures prices traded at an 11.3% discount to GDT prices from Jul ’18 – Nov ’18. SMP was not sold at the GDT auction for Contract 6 (Dec ’18).
- The GDT Price Index declined for the sixth time in the past eight auctions during the Jun 5th event, finishing down 1.3%.
- Declines in prices within the Jun 5th event were led by cheddar cheese, followed by butter, anhydrous milkfat and whole milk powder. Cheddar cheese and butter prices declined to three and four auction lows, respectively, while whole milk powder prices finished tied for the lowest figure experienced throughout the past eight auctions. Skim milk powder prices increased slightly throughout the event, finishing at a six auction high.
- Total quantities sold for all products at the Jun 5th event increased 18.8% from the previous event, finishing at an eight auction high. Total quantities sold within the first auction of June finished 0.1% below last year’s average volumes sold for the month of June and 8.9% below the previous three year average June quantities sold, however.
The GDT Price Index also remained lower on a YOY basis for the third consecutive event, finishing 3.9% below previous year price levels at the Jun 5th event. The GDT Price Index remained 27.6% above the three year average price for the first auction of June, however.
Within the latest auction, declines in prices were led by cheddar cheese (-3.6%), followed by butter (-3.5%), anhydrous milkfat (-1.7%) and whole milk powder (-1.1%). The declines more than offset increases in skim milk powder (+0.3%), rennet casein (+2.7%), lactose (+3.9%) and butter milk powder (+17.7%) prices. Sweet whey powder was not offered at the Jun 5th 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 Jun 4th 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 Jun 5th event of 21,580 MT increased 18.8% from the previous event, finishing at an eight auction high. Total quantities sold remained slightly lower on a YOY basis for the eighth consecutive auction, however.
Volumes sold for all products within the first auction of June increased 14.6% from average May volumes sold but remained 0.1% below last year’s average volumes sold for the month of June. Volume sold for all products within the first auction of June finished 8.9% below the previous three year average June quantities sold.
U.S. butter prices finished at a slight discount to GDT winning prices at the Jun 5th event despite GDT butter prices declining to a four auction low. U.S. spot butter prices are currently trading at a 3.7% discount to GDT prices while CME futures prices traded at a 1.5% discount to GDT prices from Jul ’18 – Nov ’18. Butter was not sold at the GDT auction for Contract 6 (Dec ’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 Jun 5th event, despite GDT cheddar cheese prices declining to a three auction low. U.S. spot cheddar cheese prices are currently trading at a 16.2% discount to GDT prices while CME futures prices traded at a 5.5% discount to GDT prices from Jul ’18 – Nov ’18. Cheddar cheese was not sold at the GDT auction for Contract 2 (Aug ’18) and Contract 6 (Dec ’18).
U.S. NFDM futures prices also remained at a discount to GDT winning prices at the Jun 5th event, as GDT SMP prices increased to a six auction high. U.S. spot NFDM prices are currently trading at a 14.9% discount to GDT prices while CME futures prices traded at an 11.3% discount to GDT prices from Jul ’18 – Nov ’18. SMP was not sold at the GDT auction for Contract 6 (Dec ’18).