At the Chicago Mercantile Exchange Tuesday milk futures were higher and cash dairy prices were mixed. Class III milk had a nice upswing in prices after falling during morning trading. We saw gains as high as 17 cents on March Class III milk, ending the day at $14.70/cwt. February was not as robust, finishing 1 cent higher to finish at $13.98. April was up $.12 to $14.55. May was up $.07 to $14.88. The milk futures from June through next January ranged from zero to five cents higher.
Dry whey was up $.0025 at $.3550 cents per pound. Ten sales were recorded from $.3525 to $.3575. Forty-pound blocks were up $.0150 at $1.5950 per pound. One sale was recorded at $1.59. Barrels were down $.0025 at $1.4325 per pound. Eight sales were recorded at $1.4350. Grade AA Butter was unchanged at $2.25 per pound. Eight sales were recorded from $2.2375 to $2.25. Nonfat dry milk was unchanged at $.9875 per pound. One sale was recorded at $.9850.
The Global Dairy Trade Event 230 was Tuesday. The GDT Price Index climbed 0.9 percent to an average selling price of $3,271 per tonne in the auction held in the early hours of the morning. The index had surged 6.7 pct at the previous sale. Softer global supply and slower-than-expected production growth out of New Zealand, the world’s biggest dairy exporter, was supporting prices, a reverse after falling for much of 2018.
“The conditions for the start of a new cycle have begun to emerge,” said Nathan Penny, senior rural economist at ASB Bank. “Essentially those conditions boil down to supply growth increasingly lagging behind demand growth, with little prospect of catch-up in the short-term.” But the risks of a slow-down in the Chinese economy spilling over into lower household demand for dairy remained a vulnerability to ongoing price growth, he cautioned.
In total, 25,324 tonnes were sold at the latest auction, an increase of 8.6 percent 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 percent of the nation’s gross domestic product.
The kiwi was trading up 0.5 percent at $0.6883 on Wednesday morning.
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.
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U.S.-listed CRA International Inc is the trading manager for the twice-monthly Global Dairy Trade auction.
A number of companies, including Dairy America and Murray Goulburn, use the platform to sell milk powder and other dairy products.
