Wednesday, 16 March 2016 08:54

GDT down 2.9% against expectations

Written by 

The GlobalDairyTrade price index was down 2.9% overnight, despite expectations of a small rise.

 

The whole milk powder index was down 0.8% with an average price of US$1971/MT.

ASB's rural economist Nathan Penny says the fall may reflect a similar recent price reversal in other commodity markets such as oil.

Yesterday's European Union support measures may have also led to buyers taking a step back.

Penny says ASB is maintaining its 2015/16 and 2016/17 milk price forecasts at $3.90/kgMS and $6/kgMS, respectively.
He says the GDT fall was across most products, with six of the seven the bank monitors posting price declines.

"Moreover, the dip contrasted with our expectations of a modest rise. Based on yesterday's futures prices, we had expected an overall rise in the 1%-5% range, and for a 7% rise for WMP.

"WMP fell a touch, posting a 0.8% decrease. Anhydrous Milk Fat, Butter Milk Powder and cheese all posted circa 6% drops, while SMP and butter were down close to the overall fall."

Penny says the price dip follows weaker commodity prices. For example, overnight Brent oil futures lost further ground taking prices back to around $38 per barrel, after ending last week above $40.

In addition, yesterday's EU farmer support announcements may have further muddied the dairy price waters. While the jury is out announcements' impact on prices, buyers are likely to have taken a step back to see how they play out in markets. Indeed, the price falls for near-term contracts against the rises for some longer-term contracts, is consistent with this approach from buyers."

Key GDT results were:
AMF index down 6.5%, average price US$3,014/MT; Butter index down 2.8%, average price US$2,733/MT; BMP index up 6.4%, average price US$1,545/MT;
Ched index down 5.6%, average price US$2,441/MT; LAC index up 0.8%, average price US$624/MT; RenCas index down 7.0%, average price US$4,083/MT; SMP index down 2.5%, average price US$1,731/MT;
WMP index down 0.8%, average price US$1,971/MT

More like this

Aussie farmers get A$8.60/kgMS as opening milk price

Australian dairy farmers supplying Fonterra are getting an opening weighted average milk price of A$8.60/kgMS for the new season or around NZ$9.26/kgMS -  NZ74c less than New Zealand suppliers, based on the current exchange rate.

Featured

LIC Space folds for good

Farmer co-operative LIC has closed its satellite-backed pasture measurement platform – Space.

Editorial: Time for common sense

OPINION: The case of four Canterbury high country stations facing costly and complex consent hearing processes highlights the dilemma facing the farming sector as the country transitions into a replacement for the Resource Management Act (RMA).

National

DairyNZ Farmers Forum underway

Over 300 farmers and rural professionals have gathered in Hamilton for the first DairyNZ Farmers Forum for this year.

Machinery & Products

Shearing legend hooked on CanAm

Sir David Fagan, world-renowned competitive sheep shearer with 642 shearing titles worldwide and a knighthood to his name, now runs…

50 years of tractor pull

This year, the Fieldays Tractor Pull, in association with PTS Logistics, mark a major milestone – 50 years of crowd-thrilling…

The Wrangler's birthday bash

It's the Wrangler Limited’s 30th birthday and to celebrate the milestone a prototype of the E Series Wrangler - a…

» Latest Print Issues Online

Milking It

Free speech

OPINION: The Free Speech Union is taking this one too far.

Drug survey

OPINION: New national data from The Drug Detection Agency (TDDA), a leading workplace drug tester, shows methamphetamine (meth) use is…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter