Dairy prices recorded a large 14.8 increase at last night’s GlobalDairyTrade (GDT) auction. Whole milk powder (WMP) prices (weighted average) jumped 19.1%, while skim milk powder rose 8.5% and anhydrous milk fat surged 26.6%. Minor products lactose and butter milk powder saw falls of 7.8% and 13.8%, respectively. This result is unsurprising since Fonterra last week announced a significant reduction in volume offered at this auction. Notably, WMP volume was 36% lower than at the previous auction. Notably, the overall level of prices remains low. Futures markets in this case accurately predicted the direction but not the magnitude. NZX WMP August futures closed at $1560 yesterday, predicting an 8% rise in GDT regular WMP for delivery in October, which actually cleared at $1795 – a 24% rise. Conversely, the distant delivery months rose the least – January 2016 up 14% – whereas the 4th futures contract futures predicted a 32% rise.
The material has been provided by InstaForex Company – www.instaforex.com