Archive for Dairy Markets

Class III Milk Continues Higher in Chicago Wednesday

On the Chicago Mercantile Exchange milk futures continued higher for the week while cash markets were mixed as butter stocks provide some pressure.  Class III milk liked what it saw and rallied across the board. January gained 2 to $17.05, February gained 26 to $17.80, and March gained 19 to $17.95. Second half of 2020 gained 4-16 cents and is averaging at $18.00 even for July – December.  Class IV didn’t fare as well, Jan fell 2 to $16.71, Feb fell 17 to $16.95 and March fell 7 to $17.42.

Dry whey down $0.0050 at $0.3575.  Three sales were made at that price. Blocks up $0.0375 at $2.0025.  Two trades were made at $2.0075 and $2.0150. Barrels up $0.0275 at $1.6250.  Six trades were made ranging from $1.62 to $1.6250.  Butter down $0.0150 at $1.8650.  One trade was made at that price.  Nonfat dry milk up $0.0025 at $1.2975.  Nine trades were made ranging from $1.2959 to $1.30.  The USDA says cheese stocks are declining slightly while butter inventories are building over year-ago levels. Cheese stocks totaled more 1.3 billion pounds, down half of percent on the month and two percent on the year.  Natural cheeses are down more than seven percent while American and other types of cheese are up five percent from last year. Butter inventories were up five percent from November and up almost six percent from last year at more than 190 million pounds.

Global dairy prices rise again in second auction of the year

Global dairy prices surged again in the second auction of 2020 on Wednesday, as prices increased across almost all products, with dry weather in the coming months seen as putting further upward pressure.

The GDT Price Index climbed 1.7%, with an average selling price of $3,434 per tonne, following on from a 2.8% surge in the previous auction earlier this month.

Prices gains were broad-based across products, jumping 2.4% for whole milk powder and 0.7% for skim milk powder, while butter prices rose strongly by 5.5%.

The result was likely due to a lift in demand from North Asia and the Middle East, said Robert Gibson, analyst at NZX.

A total of 33,165 tonnes was sold at the latest auction, the auction platform said on its website https://www.globaldairytrade.info.

Analysts said the dairy prices have now largely recovered ground lost at the end of 2019, and said drought risks could lend further support.

 

“Looking over February and March, emerging dry weather could put further upward pressure on prices,” ASB Bank Senior Rural Economist Nathan Penny said in a note.

“However, it’s still early days in the NZ summer and we maintain our 2019/20 production growth forecast at 0%. In other words, we are noting the drought risks at this stage,” he added.

The auction results can affect the New Zealand dollar as the dairy sector generates more than 7 percent of the nation’s gross domestic product.

The positive dairy prices, however, took a back seat as concerns over the spread of a pneumonia-like virus in China weighed on Asian currencies, with the kiwi currency staying largely flat at $0.6596 on Wednesday morning.

 

Source: Reuters

Global Dairy Trade Drives Markets Higher in Chicago Tuesday

On the Chicago Mercantile Exchange  milk futures continued higher supported by global optimism. Class III futures jumped double digits February through December 2020 and three months even touched $18 per cwt on Tuesday. February through June closed with an average price of $17.66 per cwt while second half prices are offering $17.92 per cwt. Class IV markets fell 6 cents in March but added 1-5 cents in the second half of the year. Class IV February to June is offering $17.72 per cwt and the second half is pricing out at $18.37 per cwt respectively. 

Dry whey down $0.0050 at $0.3625.  Nine sales were made at $0.3625 and $0.3650.  Blocks up $0.0025 at $1.9650.  Three trades were made at $1.9475 and $1.9550.  Barrels up $0.0350 at $1.5975.  Four trades were made at $1.5975 and $1.6025.  Butter unchanged at $1.88. Nonfat dry milk up $0.0050 at $1.2950. 

 

Optimistic Outlook for 2020 Dairy Prices

Last year was the turning point for U.S. dairy prices.

Global milk surpluses combined with burdensome dairy stocks that had weighed on the market and returned to better balance, and dairy prices finally began to climb in early 2019.

Fluid prices rose steadily throughout the year, reaching a Class I mover of $19.33 per cwt for December. The January 2020 Class I mover was $19.01 per cwt, down 32 cents from December but still a sizable increase of $3.89 over January 2019. You have to go back to 2014 to see a January Class I mover this high.

USDA and many industry observers believe 2020 dairy prices will go even higher. Long-awaited international trade deals have finally emerged and could help the dairy industry to recover.

Cow numbers creeping up
While the number of milk cows dropped steadily throughout 2018 and in the first half of 2019, this trend reversed after June when cow numbers started inching upward again.

Increasing cow numbers, combined with nonstop growth in output is leading to growth in milk production. This is particularly evident among the top 24 dairy states that USDA reports in its monthly Milk Production releases.

The November Milk Production report, released Dec. 18, showed the top 24 dairy states up 0.9% from November 2018. New York production was up 2.0% due to an increase in the number of cows and growth in per-cow output. Vermont showed a production increase of 0.5% with fewer cows but growth in output. Ohio was up 0.7% primarily on growth in output. But Pennsylvania saw a milk production decrease of 1.7% due to a sizable drop in milk cows — 24,000 — compared to November 2018.

Some industry observers are questioning if recent growth in production per cow can be sustained. While USDA estimates about 1.7% growth in production per cow, others think that 1.2% to 1.3% may be more realistic. Delayed plantings and a very wet growing season last year led to less-than-optimum feed quality and quantity that may be a factor in per-cow production growth.

Prices go higher, except for butter
The latest USDA dairy forecast has 2020 milk production up 1.74% over 2019

Higher cheese prices are expected; $1.865 per pound vs. $1.760 per pound in 2019.

Dry whey is expected to be a bit lower in 2020, but that could change if China starts buying U.S. whey again to feed its recovering swine population.

Butter prices are expected to go lower in 2020; $2.020 per pound vs. $2.240 per pound in 2019. However, nonfat dry milk is expected to go higher; $1.230 in 2020 vs. $1.040 in 2019.

All dairy product price forecasts were raised except for butter. USDA also raised its Class III and IV price forecasts.

The all-milk price forecast for 2019 was left unchanged at $18.60 per cwt. The 2020 all-milk forecast is raised to $19.40 per cwt, 55 cents higher than the previous forecast.

Prices are expected to be lower in the first quarter of 2020, then strengthen during the second half of the year.

Lots of trade activity
The final months of 2019 provided lots of activity as three important U.S. trade agreements saw movement.

The September U.S.-Japan trade agreement was followed by the U.S.-Mexico-Canada Agreement and then the U.S.-China phase-one trade deal in December.

While most U.S. ag leaders are hailing the three deals as a positive step forward, others have expressed cautious optimism. While the benefit of USMCA to U.S. dairy appears more obvious, the Japan agreement is less so, and the China deal is even less than that. Like all trade agreements, only time will tell of the true benefits to U.S. dairy and agriculture.

The U.S.-Japan trade agreement allows renewed access to the Japanese market, which many believe will lead to an additional $7.2 billion in U.S. ag exports to this growing marketplace. Most dairy industry trade groups praised the completion of phase one of this new agreement and are urging quick action on finalizing phase two to include more dairy.

USDA reports that Japan imported $14.1 billion of U.S. ag products in 2018, of which $5.2 billion was duty-free. The phase one agreement calls for a reduction or complete elimination of duties on an additional $7.2 billion in U.S. ag products.

The new trade deal with Japan should help level the playing field amongst countries that export dairy products to Japan. Prior to this agreement, other nations had preferential treatment with Japan under the terms of the Trans-Pacific Partnership (TPP), which President Donald Trump pulled out of in 2017.

The U.S. Dairy Export Council reports that Japan has tripled its purchases of U.S. cheese in the past 10 years. Japan is the second-largest importer of cheese, behind the UK. In the past, a good deal of Japan’s cheese imports came from New Zealand and Australia. Both countries are facing difficult times with weather-related issues that are affecting ag production.

Hopefully Japan will turn to the U.S. to help supply its growing demand for cheese in 2020.

USMCA was finally passed in the U.S. House of Representatives on Dec. 19. The Senate is expected to approve the trade deal soon.

USMCA replaces and updates the North American Free Trade Agreement and should provide benefits for U.S. dairy exports. Mexico and Canada are two of the most important destinations for U.S. dairy products. The new agreement includes rule changes that should eliminate some key distorting policies in Canada, such as the Class 7 program. In addition, U.S. dairy products will gain an extra 3.6% access to the Canadian dairy market. Canada has become the third-largest export market for U.S. dairy products.

The trade deal also strengthens relations with Mexico, the No. 1 market for U.S. dairy exports. The U.S. Dairy Export Council and National Milk Producers Federation estimate that once implemented, USMCA will improve dairy farm revenues by $548 million in the first six years.

The phase one trade deal between the U.S. and China was announced on Dec. 13, ending the 18-month tariff battle between the two countries. The exact details of the deal have not been released, and there are varying degrees of optimism and pessimism about what the deal will mean for agriculture.

U.S. trade officials announced that China had agreed to increase purchases from the U.S. by $200 billion over the next two years, including $40 billion to $45 billion per year of U.S. ag products.

A few years ago, pre-trade war purchases of U.S. ag goods by China topped out at around $25 billion. If China does indeed end up purchasing $40 billion of ag goods, that will represent an increase of $15 billion per year.

How much this deal will benefit U.S. dairy remains to be seen. The only thing worse than no deal is a bad deal

World outlook
Less-than-ideal dairying conditions have been plaguing major global exporters.

New Zealand milk production has suffered with bad weather issues, and Australia has been battling drought and devastating wildfires. Both countries have seen their dairy industries hit hard.

Should a few major global dairy exporters like these fall short of fulfilling demand, there may be a wider opening for U.S. dairy exports in 2020.

 

Source: American Agriculturist

Chinese Trade Deal Pushes Dairy Markets Higher in Chicago Thursday

On the Chicago Mercantile Exchange milk futures closed higher Wednesday supported by optimism brought with the signing of the China trade deal.  Class III milk responded with gains across the board. January gained 5 to 16.99, February gained 23 to 17.08, and March gained 16 to 17.42. Our first half average is at $17.31/cwt Class IV Milk was unchanged nearby – January at 16.78, February at 17.04, and March at 17.37/cwt. 

The CME spot product market saw green for every product except Butter. Dry whey up $0.0050 at $0.3650.  Five sales were made ranging from $0.36 to $0.3650.  Blocks up $0.0175 at $1.8875.  Barrels up $0.0175 at $1.4850.  Fifteen trades were made ranging from $1.4675 to %1.4950.  Butter down $0.0325 at $1.9075.  Nonfat dry milk up $0.01 at $1.2825.  Nine trades were made ranging from $1.275 to $1.2825.

Grain and Feed markets moved lower, March corn fell 1 ½ to 3.87 ½, March Soybeans fell 13 ½ cents to 9.28 ¾, and March Soybean meal fell $1.90 to trade just 10 cents over $300/ton. 

Milk Futures Lower in Chicago Tuesday

On the Chicago Mercantile ExchangeJanuary Class III milk futures down seven cents at $16.94 Tuesday. Class III milk futures were mixed but with little change. 2020 months ranged from 4 lower to 5 cents higher. First quarter 2021 also gained 6-26 cents per cwt. Class IV milk saw little change with just 4th quarter 2020 and first quarter 2021 trading. 

Dry whey up $0.0075 at $0.36.  Twelve trades made at $0.36. Blocks unchanged at $1.87.  Barrels down $0.06 at $1.4675.  Six trades were made, ranging from $1.4675 to $1.47. Butter $0.07 higher at $1.94.  Seven trades made, ranging $1.9075 to $1.94. Nonfat dry milk unchanged Tuesday at $1.2725.  Six trades were made, ranging from $1.2675 to $1.2750.\

Grain prices declined a half cent to $4.04 ¼ per lb. Soybeans were even on the day closing out at $9.69 and ½ while bean meal was down $1.50 per ton. The wheat complex was higher in each of the markets. Chicago gained 5 cents, Kansas City added 4, and Minneapolis was up slightly.

Milk Futures Slide in Chicago Monday

The Chicago Mercantile Exchange milk futures were mostly down and cash dairy prices were mixed on Monday.   Class III milk was mixed with first half of 2020 moving lower and July forward saw slight gains. January fell 2 to $17.01, February fell 8 to $16.90, our first half average sits at $17.20 per cwt. Class IV saw small gains in the first half of 3- 6 cents. January held at $16.77, February at $17.04 and March at $17.35 per cwt.

Dry whey was up $.0050 at $.3525 cents per pound.  Ten sales were recorded from $.3425 to $.3525. Forty-pound blocks were unchanged at $1.87 per pound. There were no sales recorded. Monday was also the first day of trading for block cheese futures at the CME.  In light trading, February blocks settled at $1.830. March closed at $1.836. April closed at $1.817.  May closed at $1.818.   Barrels were up $.0050 at $1.5275 per pound.  Two sales were recorded at $1.5225 and $1.5270. Grade AA Butter was down $.0500 at $1.87 per pound.  One sale was recorded at that price. Nonfat dry milk was unchanged at $1.2725 per pound.  There were three sales recorded from $1.2725 to $1.2750.

 

Positive Start to 2020 for Dairy Commodity Prices

It has been a positive start to 2020 for New Zealand dairy farmers, with commodity prices rising at the first global dairy auction for the year.

The final Global Dairy Trade (GDT) auction of 2019 saw an unexpected drop of 5.1 percent after months of gains.

However in the latest GDT auction, the overall price index lifted 2.8 percent, with average prices sitting at US$3371/t.

NZX dairy analyst, Robert Gibson said there were increases for all dairy commodities, with smaller overall supply volumes available compared with the previous event.

“The result was largely in line with NZX Dairy Derivative Market expectations leading into the event, continuing the steady and strong trend in GDT prices we have seen since around 2016,” said Gibson.

Whole milk powder (WMP) prices were up 1.7 percent to an average price of US$3150/t.

Skim milk powder (SMP) prices lifted 5.4 percent to an average price of US$3026/t. 

“Milkfats showed some strength which puts a stop to the weakening trend in prices during the previous three GDT events.”

Anhydrous milk fat (AMF) price index lifted 2.3 percent, with average prices reaching US$4929/t, while butter prices lifted 3.7 percent to an average price of US$4029/t.

Source: Newshub

Mixed Markets in Chicago Wednesday

On the Chicago Mercantile Exchange milk futures were mixed at midweek as traders balance improving global markets with negative cash cheese movement.  Class III milk fell 10 cents in January to $17.00 even, February also moved 10 lower to $17.09 and March fell 7 to $17.34, the balance of 2020 was even to a couple cents higher. Our first half average sits at $17.25 per cwt.  Class IV milk fell 1 in January to $16.79, fell 8 in February to $16.95 and march moved 9 lower to $17.27. June – December was unchanged and our first half average for Class IV milk sits at $17.41 per cwt.

Wednesday saw the CME spot trade move mostly lower, Dry whey down $0.0025 at $0.3225.  Ten sales were made at that price.  Blocks down $0.0375 at $1.8425.  Eight trades were made ranging from $1.8425 to $1.85. Barrels down $0.0625 at $1.58.  Eight trades were made ranging from $1.58 to $1.6025.  Butter down $0.01 at $1.87.  Two trades were made at $1.8525 and $1.8575.  Nonfat dry milk up $0.0050 at $1.26.  Two trades were made at $1.26 and $1.2650. 

Grain markets were mixed ahead of Friday’s January USDA supply and demand report. March corn fell a quarter of a cent to $3.84 ¼, January soybeans gained 3 ¼ to $9.38 ¼, and January soybean meal gained 50 cents to $296.90 per ton.

Global Dairy Trade Nearly 3% Higher

Event 251 of the Global Dairy Trade took place on Tuesday with all offered products closing higher for the session.

Global dairy prices jumped at the first auction of the year on Wednesday as low supply supported a surge across all products.

The GDT Price Index climbed 2.8 percent, with an average selling price of $3,371 per tonne, paring the 5.1% drop at the previous sale last month.

Prices gains were broad-based across products, jumping 1.7% for whole milk powder, the top traded item, and 5.4% for skim milk powder.

“This was underpinned by price increases for all dairy commodities, with smaller overall supply volumes available compared with the previous event, which is typical for this time of year but is likely to have contributed to the uptick in demand,” said Robert Gibson, analyst at NZX.

A total of 33,050 tonnes was sold at the latest auction, down 7.5 percent from the previous one, the auction platform said on its website.

Analysts said that prices would likely be supported in the early months of 2020 by constrained supply in New Zealand, the world’s largest dairy exporter.

Global Trade Drives Class III Milk Futures Higher in Chicago Tuesday

On the Chicago Mercantile Exchange milk futures were higher Tuesday on positive global markets while cash trade was mixed.  Class III milk futures were higher on Tuesday after the positive GDT session. First half 2020 months rose 10-25 cents while the second half traded 60-10 cents higher. Class IV was also stronger as months ended even to 15 cents higher.     

CME spot product markets on Tuesday had dry whey up $0.01 at $0.3250.  Seven sales were made ranging from $0.3150 to $0.3250.  Blocks unchanged at $1.88. Barrels unchanged at $1.6425.  Butter down $0.0150 at $1.88.  Two trades were made at $1.88 and $1.8950.  Nonfat dry milk up $0.0225 at $1.2525.  Ten trades were made ranging from $1.25 to $1.2550. 

Milk Futures and Cash Dairy Start Week Slower and Lower in Chicago

On the Chicago Mercantile Exchange milk futures started the first full week of the new year in limited trade as did cash trade. Class III milk gained 4 cents in Jan to 16.97, Feb fell a penny to 17.01, and March fell 1 to 17.24/cwt. Class IV milk saw a bigger swing. January fell 17 to 16.79, Feb fell 15 to 17.03, and March fell 8 to 17.28/cwt.

The CME spot trade was relatively quiet.  Dry whey unchanged at $0.3150.  Twelve sales were made ranging from $0.31 to $0.3150.  Blocks down $0.01 at $1.88.  Five trades were made at that price.  Barrels unchanged at $1.6425.  One trade was made at that price.  Butter down $0.0550 at $1.8950.  One trade was made at that price.  Nonfat dry milk unchanged at $1.2325. 

Milk Markets Start 2020 Lower in Chicago

On the Chicago Mercantile Exchange milk futures  started the first trading day of the New Year lower as did most cash markets. January Class III milk fell 20 cents to $17.06, February fell 30 to $17.08, and March fell 18 to $17.25. June forward was mostly unchanged. We have a first half average at $17.24 per cwt.  Class IV milk however saw nice gains to start 2020. January gained 13 to $16.92, February gained 16 to $17.09, and March gained 15 cents to $17.34 per cwt. May – August saw some slight moves lower, however. First half for class IV milk is averaging at $17.40 per cwt.

Dry whey unchanged at $0.3125.  Ten sales were made at that price.  Blocks down $0.0075 at $1.9025.  One trade was made at $1.9050.  Barrels down $0.0675 at $1.6425.  Two trades were made at $1.6425 and $1.6450. Butter unchanged at $1.95.  Nonfat dry milk down $0.0025 at $1.2275.  One trade was made at that price. 

Feed and Grain markets saw nice gains to start the new year. March corn gained 3 ¾ to $3.91 ½, January soybeans gained 1 ¼ to $9.44 ¼, and January soybean meal gained $0.70 to once again move above the $300 mark to $300.60 per ton.

2020 Milk Prices Predicted to Rise

Glass-bottled milk from Yoder’s Country Market is a staple of Doorstep Dairy’s offerings.

Farmers could see a boost in long-depressed milk prices next year, after gaining a dollar or more per hundredweight this year.

USDA’s average projected all-milk price for 2020 is $19.40 per hundredweight, an 80-cent increase over this year, said Zach Myers, risk education manager at the Center for Dairy Excellence.

He spoke Dec. 18 during the monthly Protecting Your Profits call.

“Class III price peaks at about $19.50 per hundredweight this month and declines to the lower 17’s by next spring before rising into the upper 17’s by fall of 2020,” Myers said.

Class IV milk &tstr; used for butter and dry products &tstr; is expected to rise from $17.50 per hundredweight into the mid-$18 range.

Class IV prices is expected to top Class III in late winter or early spring and remain there for the rest of 2020.

October’s year-over-year commercial disappearance, a measure of demand, increased 18% for milk powder, 6% for American cheese and 4% for butter.

Dairy exports could set a record this year. Trade friction with China, Canada and Mexico has been offset by rising milk prices and increasing sales to Southeast Asia, South Korea and South America, Myers said.

The U.S. is exporting about 15% of its milk supply and importing about 4%.

The sign-up period for Dairy Margin Coverage was extended to Dec. 20.

At the time of the call, only 19% of dairies nationwide had enrolled, and only 8% in Pennsylvania, Myers said.

That’s a steep drop-off from the 61% nationally and 36% in Pennsylvania who signed up for 2019 coverage just a few months ago.

While enrollment would normally be held before the year begins, the sign-up period for 2019 ended in September because the Farm Bill, which authorizes the program, was passed very late last year.

About 200 Dairy Revenue Protection insurance policies have been sold in Pennsylvania. More than 3,400 have been sold nationwide.

In 2020, the Protecting Your Profits call will shift to a webinar and podcast, though the program will still be provided by phone for listeners without internet access.

Some months may feature an extended program with guest speakers on dairy pricing and risk management.

The next call, at noon on Jan. 22, will feature Katie Burgess, a commodity risk analyst at Blimling and Associates.

Source: lancasterfarming.com

Milk Markets Take a Punch in Chicago on Boxing Day

On the Chicago Mercantile Exchange Thursday milk futures and cash dairy prices were down except butter.  Class III milk continued to slide with December down 1 to $19.35, January fell 35 cents to $16.96, and February fell 29 to $17.03 per cwt. First half of 2020 is averaging at $17.14 per cwt. Class IV milk was mostly unchanged. December held at $16.72, January fell 12 to $16.98 and February held at $17.31 per cwt.

Dry whey was down $.0125 at $.3075 cents per pound. There were ten sales recorded from $.3050 to $.3150. Forty-pound blocks were down $.0325 at $1.80 per pound. There were three sales recorded at $1.79 and $1.80. Barrels were down $.0825 at $1.63 per pound. Four sales were recorded from $1.6325 to $1.7125. Grade AA Butter was up $.0025 at $2.03 per pound. There were no sales recorded. Nonfat dry milk was down $.0050 at $1.2375 per pound. There were no sales recorded.

Grain markets followed a very strong wheat trade with Chicago gained 8 cents to $5.49 and Kansas City up 10 to $4.70 ½. March corn was a penny higher at $3.88 ½, January soybeans gained 1 ¼ to $9.37 ¾, and January soybean meal fell $2.30 to $299.50 per ton.

Dairy Prices Expected to Strengthen in 2020

USDA’s latest dairy outlook reveals minimum changes in the balance sheets or this year and next, but continued growth in product and class prices in 2020.

“Pretty small changes to the milk supply and demand balance sheet this month,” said Mark Jekanowski, acting World Agricultural Outlook Board Chair. “Imports of butter will weaken a bit for the remainder of this year and into next year. On the other hand, we see some strength in exports of butter.”

When it comes to exports, there is supposed to be strength in global demand for nonfat dry milk, which will support higher class for milk prices moving into 2020.

USDA is forecasting a $1 increase in class four milk prices for 2020, and class three prices are set to rise at 15 cents per hundredweight, with lower cheese prices offsetting increased prices for butter. The end result is that all milk prices for next year are forecasted at $19.40 per hundred, up 55 cents from the previous month and 80 cents higher than 2019.

Source: hoosieragtoday.com

Mixed Markets Thursday in Chicago

On the Chicago Mercantile Exchange milk futures closed mixed Thursday as did cash trade.  December falling 3 cents to $19.36, January gained 6 to $17.40 and February – June were off 2-7 cents. Our first half is averaging $17.24 per cwt. Class IV milk responded more positively, though December was unchanged at $16.72, January gained 3 to $17.00, and February gained 8 to $17.25 per cwt.

Dry whey down $0.0025 at $0.3125. Ten sales were made ranging from $0.3125 to $0.3225. Blocks down $0.05 at $1.85. Barrels up $0.01 at $1.6250. Seven trades were made ranging from $1.6250 to $1.6425. Butter up $0.01 at $2.00. Two trades were made at $2.0050 and $2.0125. Nonfat dry milk up $0.01 at $1.2525. One trade was made at that price.

Grain markets were fairly quiet after some nice gains that last week. March corn fell ½ a cent to $3.86 ½, January soybeans fell 4 cents to $9.24 ½, and January soybean meal fell $4.50 to $298.40 per ton.

Milk back in the Green after Steep Decline

After a steep decline, Class III prices closed 38-42 cents in the green on Wednesday whereas we were up 24-28 cents in the second quarter. Second half 2020 added 9-17 cents as well. 

Dry whey up $0.0050 at $0.3150. Blocks up $0.0575 at $1.80. Four trades made, ranging from $1.77 to $1.80. Barrels up $0.0450 at $1.6150. Six trades made, ranging $1.58 to $1.62. Butter up $0.0025 at $1.99. Nonfat dry milk down $0.0075 at $1.2425. Six trades made, ranging from $1.2425 to $1.25.

 

Big fall in dairy prices in global auction

Tuesday started with another Global Dairy Trade event. Overall dairy prices fell 5.1 percent in the first significant fall since August. Prices dropped to $US33302 a tonne. Whole milk powder, a key indicator of farm incomes, dropped 6.7 percent. Skim milk powder was down 6.3 percent. Butter fell 2.4 percent but there were rises for cheddar and rennet casein. Last night’s significant fall follows a slight drop two weeks ago, but prices had been rising before then.

Class III Futures Drop Below Class IV in Chicago Tuesday

January Class III milk futures closed 39 cents lower at $16.96 on the Chicago Mercantile Exchange Tuesday.  February fell 11 to $17.07. We saw March, April, and May actually trade up 1-7 cents. First half 2020 is averaging $16.97 per cwt. Class IV milk was unchanged in December and January at $16.73, and $16.98. February fell 5 to $17.19 per cwt. We again see Class IV futures trading above Class III in 2020.

Dry whey down $0.0025 at $0.31. Blocks down $0.0275 at $1.7425. Five trades were made, ranging from $1.7425 to $1.7550. Barrels down $0.04 at $1.57. Ten trades made, ranging from $1.57 to $1.5925. Butter $0.0075 higher at $1.9875. Nonfat dry milk down $0.0150 at $1.25.

Milk Futures Continue to Dive Sharply in Chicago Monday

On the Chicago Mercantile Exchange Monday milk futures were down sharply and cash dairy prices were mostly down. Class III futures markets lost 68 cents in January, 42 cents in February and 24 cents in March. April and beyond in 2020 fell 3-13 cents as well. Class IV milk softened 1-12 cents per cwt in the first part of 2020. 

Dry whey was down $.0250 at $.3125 cents per pound. There were eight sales recorded from $.3125 to $.3325. Forty-pound blocks were down $.0275 at $1.77 per pound. There was one sale recorded at that price. Barrels were down $.0850 at $1.61 per pound. Five sales were recorded from $1.61 to $1.65. Grade AA Butter was up $.0200 at $1.98 per pound. There were five sales from $1.9650 to $1.98. Nonfat dry milk was unchanged at $1.2650 per pound. There were no sales recorded.

Grain markets all traded higher to begin this week off of positive trade news. Corn added 7 cents, soybeans were up 14.5 cents and the wheat complex traded 11-19 cents per bu.

Milk Futures Rally in Chicago Thursday While Cheese and Whey Get Destroyed

On the Chicago Mercantile Exchange milk futures closed higher Thursday while cash trade was mixed. Class III milk prices put together a solid performance. December added 6 cents while first half 2020 ranged from 2-11 cents higher. Class IV made modest gains as well out into the first half of the year. 

The barrel cheese market continued to get destroyed on Thursday as another 10 ¼ cents came out of the market following 7 loads moving from seller to buyer.  Dry whey down $0.01 at $0.3425. Seven sales were made ranging from $0.3425 to $0.3550. Blocks down $0.0525 at $1.8575. Butter up $0.0050 at $1.9550. Two trades were made at $1.95 and $1.9525. Nonfat dry milk up $0.0050 at $1.2575.

Over the grain markets, corn gained back the 6 cents that it lost yesterday following solid export data being released. Soybeans tagged along trading 4.5 cents stronger, and wheat jumped 11-12 cents in Chicago and Kansas City.

Milk Markets Continue to Slide Downward in Chicago Wednesday

Milk moved sharply lower after the 11 a.m. CME spot trade, but saw some most months rebound a bit. The day finished with December 6 cents lower to $19.37 on the Chicago Mercantile Exchange. January fell 21 to $18.19, February fell 7 to $17.56. Our first half is averaging at $17.32 per cwt. Class IV milk didn’t see as much of a move. December was unchanged at $16.74, January fell 4 to $16.99, and February fell 9 to $17.29 per cwt.

Dry whey down $0.01 at $0.3525. Three trades made, ranging from $0.3525 to $0.3550. Blocks down $0.0375 at $1.91. Barrels down $0.0850 at $1.8625. Butter up $0.01 at $1.95. Nonfat dry milk down $0.01 at $1.2525. Two trades were made at $1.2525.

Feed and Grain expenses continue to fall. December corn fell 5 ½ to $3.57 ¾, January soybeans fell 7 ¾ cents to $8.93 ½, and December soybean meal fell $3.60 to $293.30 per ton.

Milk Futures and Cash Dairy Tumble on Tuesday in Chicago

On the Chicago Mercantile Exchange Tuesday most milk futures and cash dairy prices were down significantly.  Class III milk markets had nowhere to go but down following the barrel cheese performance. Milk declined 8 cents in December and ranged from 16 to 24 cents softer in the first half of 2020. The first half 2020 market is offering producers $17.40 per cwt. Second half 2020 watched July fall 10 cents while the remaining months were a penny higher to 3 cents lower. Class IV milk softened 2-12 cents January through September 2020. First half Class IV 2020 prices are offering $17.60 per cwt. 

Dry whey was unchanged at $.3625 cents per pound. Five bids were offered, but no sales were recorded. Forty-pound blocks were down $.0225 at $1.9475 per pound. No sales were recorded. Barrels were down $.1325 at $1.9475 per pound. Two sales were recorded at $1.9775 and $2.00. Grade AA Butter was up $.0100 at $1.94 per pound. One sale was recorded at that price. Nonfat dry milk was down $.0050 at $1.2625 per pound. There were five offers and two bids, but no sales recorded.

Mixed Markets Monday in Chicago

On the Chicago Mercantile Exchange milk futures closed mixed while the cash cheese market posted large seasonal losses Monday. Class III milk started the day with green on the overnight into the 11 am CME spot trade, but fell as our cheddar loads showed up to the market. But we didn’t move as low as we normally would expect with a 14 + cent move in Barrels. We finished the day mixed. December fell 4 to $19.51, January gained 2 to $18.64, and February was unchanged at $17.85. Class IV was unchanged nearby with December holding at $16.74, Jan fell 3 to $17.06, but February- April gained 5-7 cents with Feb at $17.42 per cwt.

Dry whey down $0.0050 at $0.3625. Three sales were made at $0.3625 and $0.37. Blocks unchanged at $1.97. Four trades were made ranging from $1.92 to $1.9850. Barrels down $0.1475 at $2.08. Three trades were made at that price. Butter up $0.0150 at $1.93. Three trades were made ranging from $1.9175 to $1.93. Nonfat dry milk unchanged at $1.2675.

Grain markets continue to see mixed trading with December corn falling ¾ of a cent to $3.65 ¾, November soybeans gained 7 ¾ cents to $8.97 ¼ , though December soybean meal didn’t follow soybeans, falling 70 cents to $296.70 per ton.

Milk Futures Give Back Some of the Recent Gains in Chicago Thursday

On the Chicago Mercantile Exchange milk futures closed mostly lower Thursday following negative movement in the cash market. Class III milk gave back some of it’s recent gains Thursday on a quiet CME spot trade. December gained 2 cents to 19.37, January fell 31 cents to 18.60, and February fell 29 to 17.91/cwt. The First half 2020 Class III average is at 17.62/cwt.   Class IV milk was quieter falling 6 in December to 16.74, falling 2 in January to 17.04, and falling 1 in February to 17.33/cwt.

Dry whey unchanged at $0.3675. Blocks down $0.0025 at $1.9725. Barrels down $0.01 at $2.2425. Butter down $0.02 at $1.9150. Two trades were made at $1.9150 and $1.92. Nonfat dry milk unchanged at $1.2475. Five trades were made at $1.2450 to $1.2475.

Grain and feed markets saw December corn fall 3 ¼ to 3.65 1/2, January Soybeans gained 6 ¼ to 8.84 ¼, and December Soybeanmeal gained $4.90 to $299.50/ton

Fonterra raises milk solids farmgate price

The forecast payout to farmers for milk was now $7.00-$7.60 per kgMS for the 2019-2020 season.

Fonterra chairman John Monaghan said the co-op had continued to earn good prices for its milk.

Whole milk powder prices, which were a key driver of milk price, were at their highest level in three years.

The company’s first quarter earnings ending in October, before interest and tax, were up $233 million to $259m, from $26m the year earlier.

It said normalised earnings, which better reflected the underlying performance of the business, rose significantly to $171m, from $26m the year earlier, with a 14.5 percent improvement in gross margins.

The co-op had also cut costs by $104m and said it remains focused on reducing debt.

“This will require us to achieve a gross margin of $3 billion, further reduce operating expenditure, lower capital expenditure by $100m to $500m, and also divest some more assets,” Mr Monaghan said.

He said the increased milk price was putting pressure on costs, but it was maintaining its full year normalised earnings forecast at 15 to 25 cents a share.

“The higher price reflects a global dairy market that is tipped slightly in favour of demand.”

Mr Monaghan said New Zealand milk production was forecast to be up 0.5 percent on last year, with annual milk production in the other key global supply regions of the United States and Europe growing at less than 1 percent.

“On the demand side, global dairy trade prices have increased by about 6 percent since our previous forecast.

“Farmers will welcome what would be the fourth highest milk price in our history,” he said, adding it represented an $11.2b cash injection into the economy.

Source: rnz.co.nz

Milk Futures Climb Higher in Chicago Wednesday

On the Chicago Mercantile Exchange Milk futures were mostly up and cash dairy prices were mixed Wednesday.  Class III milk saw December gain a penny to $19.35, Jan fell a penny to $18.91. Class IV milk fell 4 in December to $16.80, January fell 14 to $17.06.

Dry whey was up $.0125 at $.3675 cents per pound. No sales were recorded. Forty-pound blocks were up $.0275 at $1.9750 per pound. Four sales were recorded from $1.9575 to $1.9750. Barrels were down $.0100 at $2.2525 per pound. No sales were recorded. Grade AA Butter was down $.0075 at $1.9350 per pound. One sale was recorded at that price. Nonfat dry milk was down $.0025 at $1.2475 per pound. No sales were recorded.

 

Slight drop of 0.5% after 5 consecutive rises at Global Dairy Trade

Global Dairy Trade price index goes down on Wednesday amid lower market demand for milk fats.

The GDT price index fell 0.5 percent from 3,481 U.S. dollars per tonne at the previous auction two weeks ago to 3,467 U.S. dollars per tonne, its first decline since early September.

A total of 36,258 tonnes of product was sold, down from 37,968 tonnes two weeks ago.

“The decrease was driven by lower demand for milk fats which offset strong prices continuing for milk powders,” NZX dairy analyst Robert Gibson said.

Whole milk powder increased just 0.1 percent to 3,331 U.S. dollars per tonne. It was the highest average price in three years, according to Gibson.

Rennet casein increase 4.9 percent to 8,047 U.S. dollars per tonne, and cheddar gained 2.7 percent to 3,797 U.S. dollars per tonne. Skim milk powder grew 1.9 percent to 3,068 U.S. dollars per tonne.

On the other hand, anhydrous milk fat decreased 5.1 percent to 4,840 U.S. dollars per tonne, while butter fell 4.9 percent to 3,983 U.S. dollars per tonne.

Global Dairy Trade Drives Milk Futures Lower in Chicago Tuesday

Tuesday’s Global Dairy Trade index fell half-a-percent, with the average price of dairy products settling at $3,467 a metric ton.  It’s the first overall decline since September 19th, with three of the last five trading sessions showing significant gains. On the Chicago Mercantile Exchange milk futures were down and cash dairy prices were mixed Tuesday.  Class III milk was softer. December gained 1 to $20.41, but Jan fell 2 to $19.34, and Feb fell 7 to $18.92 per cwt. Our first half average for 2020 sits at $18.17 per cwt. Class IV milk was unchanged in December at $16.65, but saw January fall 14 to $16.84, February fell 20 to $17.20 and the Class IV first half average for 2020 is at $17.43 per cwt.

Dry whey was unchanged at $.3550 cents per pound. No sales were recorded. Forty-pound blocks were up $.0150 at $1.9475 per pound. One sale was recorded at that price. Barrels were up $.0050 at $2.2625 per pound. Five sales were recorded from $2.2575 to $2.2625. Grade AA Butter was down $.0275 at $1.9475 per pound. Three sales were recorded from $1.9425 to $1.9450. Nonfat dry milk was down $.0125 at $1.25 per pound. One sale was recorded that price.

Dairy Markets Higher in Chicago Monday

On the Chicago Mercantile Exchange milk futures closed higher even with mixed cash trade Monday.  Class III futures markets were able to put together another round of higher trade, highlighted by the January and February months which were up 19 and 12 cents respectively. March through December 2020 ranged from 2 softer to 8 higher. The first half 2020 average closed at $17.90 per cwt. While the 2nd half of the year is offering $17.55 per cwt.  Class IV milk in contrast lost 10 cents in. December while January fell 11 cents, and February through June dropped 2-6 cents per cwt. The first half of 2020 for Class IV is offering $17.76 per cwt. 

Dry whey up $0.0025 at $0.3550. Blocks down $0.03 at $1.9325. Four trades were made ranging from $1.9175 to $1.96. Barrels up $0.01 at $2.5475. Four trades were made ranging from $2.2475 to $2.2575. Butter down $0.0275 at $1.97. Three trades were made ranging from $1.97 to $1.99. Nonfat dry milk up $0.0250 at $1.2625. One trade was made at that price.

Milk Price predicted to reach $20

After more than four years of disappointing milk prices, markets are delivering profitable prices to dairy producers.

While cheese markets have been on a roller-coaster ride for the last couple of months, they’ve been strong enough to support Class III milk prices above $18 per hundredweight.

Stocks of American-style cheese were down 4% year over year in September and production was down 3%. Cheese exports were up 12% year over year in September and are up 3% for the year through September, Bob Cropp, dairy economist with the University of Wisconsin, said in the latest Dairy Situation and Outlook podcast.

Cash price for blocks and barrels on the Chicago Mercantile Exchange this fall had gotten up to well over $2 a pound, with barrels as high as $2.39 a pound, he said.

On Nov. 21 the CME cash price was $2.18 for barrels and $1.84 for blocks.

“So they’re weakening, but they’ve been strong up to here,” he said.

“As a result, I think we’re looking at a pretty nice Class III price for November … over 20 bucks,” he said.

The USDA announced Class III price for October was $18.72, after starting the year at $13.96.

Milk prices for 2019 should end up about $2.20 per hundredweight higher on average than last year’s average, Cropp said.

There’s been some contraction in the CME futures price for December, but futures prices have been holding up OK, Mark Stephenson, fellow dairy economist at the university, said.

Futures prices for Class III milk were in the $16 for the first quarter of 2020. Now they’ve gone to the $17s, and Cropp thinks prices will be even stronger than what the futures market or USDA are forecasting, he said.

“I look for demand for cheese to stay pretty good, and I actually look for exports to do a little better,” he said.

And he’s not expecting any surges in milk production, globally or in the U.S.

Milk cow numbers in the U.S. in October were up 5,000 head from September but were still down 40,000 head from October 2018. Milk production per cow was up 1.7% year over year, leading to a 1.3% increase in milk.

University extension agents across the country are reporting forage quality at average to poor and forage supplies at average to short, which will likely affect production per cow, Stephenson said.

“I just do not see milk production coming on strong with finances stressing farmers for expansion, feed quality and production per cow, replacement numbers and farmers still exiting,” Cropp said.

He’s expecting Class III milk prices in the strong $17s in the first half of the year and into the $18s in the second half.

Stephenson’s forecast is in the same ballpark and maybe even a little higher by the end of next year, he said.

“Certainly this is a good year, and next year is likely to be somewhat better,” he said.

Barring anything that would affect demand, “things look a lot rosier for 2020” than the past 4-1/2 years, Cropp said.

Source: Capital Press

Dairy Markets in Chicago Close Higher Before Thanksgiving Break

On the Chicago Mercantile Exchange milk futures closed mostly higher Wednesday to round out the holiday-shortened week supported again by strong cash cheese trade. Class III futures contracts followed product higher gaining 23 cents in December, 14 in January and February foward ranged from 5 lower to 9 higher. Class IV markets added 1-6 cents on Wednesday. 

Dry whey unchanged at $0.3525. Blocks up $0.0325 at $1.9625. One trade was made $1.9775. Barrels up $0.0550 at $2.2475. Butter down $0.0125 at $1.9975. One trade was made at that price. Nonfat dry milk up $0.0075 at $1.2375. Nine trades were made on a range of $1.2250 to $1.24.

New Zealand milk price rises, volatility eases

Skim milk powder prices have reached a five-year high.

ASB bumped up its this season milk price forecast by 50c to $7.50/kgMS after last week’s 1.7% rise in the Global Dairy Trade.

And its senior rural economist Nathan Penny says most importantly the bank now believes we are likely to see less milk price volatility in the future.

“We believe that the fall in milk price volatility is structural in nature. In that sense, the farmgate milk price is moving to a higher plateau,” he said.

While BNZ has not moved yet from $7.10/kgMS, senior economic Doug Steel told Dairy News current market conditions suggest towards the top end of Fonterra’s $6.55 to $7.55/kgMS range. 

Westpac has more conservatively revised upwards for the current season to $7.10/kgMS. Westpac head of NZ strategy, Imre Speizer, says they are cautious about Chinese demand and allow for a modest pullback in world dairy prices over the first half of 2020.

Steel says last week’s GDT gain was slightly lower than expected but still the fifth consecutive price increase. 

“This takes the cumulative rise since early September through to 8.3%. Prices are now 26.4% higher than a year ago and heading towards the top of a range that has contained them since 2014.”

Milk powder prices drove the increase with skim milk powder (SMP) up 3.3% and whole milk powder (WMP) up 2.2% (average prices now US$3321/tonne). But fat prices eased with butter and AMF down 1.3% and 1.5% respectively. 

“Dairy market fundamentals still look healthy to us, with demand seemingly firm (unsatisfied bidders remain high, at 53) and supply is subdued (volumes sold at this event were 11.6% lower than a year ago),” he said.

Obvious offshore risks require monitoring. 

“On supply, latest data shows NZ October milk production was down 1.5% on a year ago. Admittedly last spring was strong but signs that NZ production is now not keeping pace with last year are supporting prices.”

Speizer, from Westpac, says WMP momentum remains clearly upwards, having risen a total of 12% since this sequence of auction price gains started in early July. It is up 28% from the low in November 2018.

Despite a slight pullback in participation, demand from China has remained solid so far this year, and has been almost the sole source of growth for New Zealand’s dairy exports, he says.

For the season to date, total New Zealand collections are just 0.5% above the 2018 equivalent. 

“This update is unsurprising, given spring has been cooler than average in many regions. October is the largest milk production month, closely followed by November and December, which means there’s little chance of domestic supply rising significantly in the near term given lagged weather impacts.

“Global supply remains constrained, with the US and EU flat over the past year. The implication from a supply perspective is that prices should remain firm.”

Meanwhile ASB’s Penny has a next season forecast range of $6.50 to $7.50/kgMS.

Northern Hemisphere growth is soft with annual production growth only marginally above flat in both the European Union and the US.

Source: ruralnewsgroup.co.nz

Milk Futures Continue Higher in Chicago Coming into Thanksgiving Holiday

On the Chicago Mercantile Exchange milk futures closed higher Tuesday supported by strong cash trade and positive export prospects. Markets will be closed Thursday and Friday for the holiday. Class III Milk’s turkey trot higher continued Tuesday. Driven by a positive move in cheese, December gained 28 cents to $19.09, January gained 30 to $18.66, and February gained 31 cents to $18.08. November gained one as we near the end of the month at $20.37 per cwt.  Class IV milk though unchanged in November at $16.65, December gained 7 to $17.10, and January gained 5 to $17.39 per cwt. 

Dry whey up $0.0025 at $0.3525. Blocks up $0.0475 at $1.93. Two trades were made at $1.93 to $1.9325. Barrels up $0.05 at $2.1925. One trade was made at that price. Butter unchanged at $2.01. Nonfat dry milk up $0.01 at $1.23. Six trades were made on a range of $1.22 to $1.23.

Grain markets showed some weakness, December corn fell 3 cents to $3.67 ½, January soybeans fell 8 ¼ to $8.84 ¼, and December soybean meal fell $3.60 to $294.70 per ton.

Milk Futures Start Thanksgiving Week Higher in Chicago

Milk futures on the Chicago Mercantile Exchange closed higher Monday while cash trade was spilt. Markets will be closed Thursday and Friday for the holiday. November Class III milk unchanged at $20.36. December a penny higher at $18.79. January six cents higher at $18.36. February up two cents at $17.77. March through June contracts unchanged to eight cents higher.  Class IV markets made modest gains as well adding 1-8 cents over the first half of its trade. The first half Class IV average is currently sitting at $17.74 per cwt. 

Dry whey up $0.0025 at $0.35. One sale was made at that price. Blocks up $0.04 at $1.8825. Four trades were made ranging from $1.8425 to $1.8825. Barrels down $0.0425 at $2.1425. Once trade was made at $2.11. Butter down $0.0150 at $2.01. Eight trades were made ranging from $2.01 to $2.0225. Nonfat dry milk unchanged at $1.22.

The grain complex experienced strength in the wheat market as Chicago jumped 15 cents, Kansas City was up 12 cents and Minneapolis added 6 cents. Corn followed along gaining 2 cents while soybeans fell 4 and a half cents. 

Milk Futures See Double Digit Gains in Chicago Thursday

On the Chicago Mercantile Exchange milk futures showed solid strength Thursday as cheese markets showed back up to work. Class III milk markets gained 3 cents in November and 27 cents in December 2019. First quarter 2020 traded 14-29 cents stronger while the second quarter ranged from even to 10 cents higher. Second half 2020 prices declined 1-4 cents per cwt.  Class IV markets watched December fall 4 cents, March declined 3 cents while June traded 5 cents higher. The USDA’s cold storage report will be released Friday. 

November Class III milk up three cents at $20.37.  December up 25 cents at $18.69.  January 23 cents higher at $18.19.  February up 24 cents at $17.69.  March through June contracts unchanged to 14 cents higher. Dry whey up $0.01 at $0.3550.  Three trades were made ranging from $0.35 to $0.3550. Blocks up $0.0050 at $1.8425.  Four trades were made ranging from $1.8225 to $1.83.  Barrels up $0.0350 at $2.1850.  Butter down $0.0075 at $2.04.  Three trades were made ranging from $2.04 to $2.0525.  Nonfat dry milk unchanged at $1.2250

Over in the grains, corn added 1 and three-quarter cents per bu., soybeans lost 4 cents and wheat dropped 4-6 cents per bu. Crude oil continued its higher run this week adding $1.30 on Thursday and closing at $58.39 per barrel.

Milk Futures Higher Midweek in Chicago

On the Chicago Mercantile Exchange Milk futures continued higher at midweek as strong global trade continues to carry markets.  Class III milk futures were mixed on Tuesday. November added 2 cents to $20.34 per cwt while December added 5 cents to $18.44 per cwt. First half 2020 traded even to 4 cents higher while second half prices closed even to 2 cents lower.  Class IV markets were slightly lower on Tuesday. First half 2020 fell 1-12 cents and closed with an overage of $17.70 per cwt.

Dry whey up $0.0125 at $0.3450. One trade was made at that price. Blocks unchanged at $1.8375. Barrels unchanged at $2.15. Butter down $0.0175 at $2.0475. Three trades were made ranging from $2.04 to $2.0575. Nonfat dry milk down $0.01 at $1.2250. One trade was made at that price

Grain prices felt weakness once again. Corn declined 3 and a quarter cent to $3.66 and three-quarters, soybeans dropped 6 and a half cents to $9.05 even and the wheat complex ranged from three and a half cents higher in Chicago to 3 cents lower in Minneapolis. 

 

Dairy margins widen to highest since 2017 in positive economic sign

In welcome news for the dairy economy, the September margin under the Dairy Margin Coverage program rose by $0.56 per cwt. over the August margin to reach $10.41 per cwt, the second consecutive month margins have fallen outside the threshold necessary to trigger a federal payment. The is the highest seen since the beginning of 2017, allowing for the change in the alfalfa hay price in the margin formula’s feed cost calculation. The September all-milk price was $0.40 per cwt. higher than August’s and the DMC calculated feed cost for September was $0.16 per cwt. lower than August’s, mostly due to a drop in the price of corn.

As of Nov. 6, USDA’s DMC Decision Tool currently projects DMC margin to remain above $9.50 per cwt. for the remainder of 2019 and during all of 2020. Milk prices are expected to generate most of the monthly changes in the margin forecast, while feed costs are anticipated to remain relatively stable during that time.

Source:ocj.com

Global dairy prices rise for fifth time in a row

Global dairy prices rose for the fifth time in a row at a fortnightly auction held early on Wednesday as constrained global supply provided support.

The GDT Price Index climbed 1.7%, with an average selling price of $3,481 per tonne, having risen 3.7% in the previous sale.

“It is strength in the milk powders that have driven the latest increase,” said Robert Gibson, analyst at NZX. “This is likely due to Northern Hemisphere production being at a seasonally low point in the year, and milk supplies continuing to wane from Southern Hemisphere countries, with New Zealand starting to ease back on the previous year’s supplies too.”

Prices for whole milk powder, the most widely traded item at the auction, rose 2.2% to its highest level in almost three years, while skim milk powder prices jumped 3.3%.

A total of 37,968 tonnes was sold at the latest auction, falling 1.8% from the previous one, the auction platform said on its website.

The auction results can affect the New Zealand dollar as the dairy sector generates more than 7% of the nation’s gross domestic product.

The kiwi currency was up 0.5% on Wednesday morning, trading around a two-week high of $0.6430.

GDT Events is owned by New Zealand’s Fonterra Co-operative Group Ltd, but operates independently from the dairy giant.

The New Zealand milk co-operative, which is owned by about 10,500 farmers, controls nearly a third of the world dairy trade.

U.S.-listed CRA International Inc is the trading manager for the twice-monthly Global Dairy Trade auction.

The next auction is scheduled for Dec. 3.

Source: reuters.com

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