After four consecutive auctions where the GDT has declined, there is some hope that the benchmark dairy index will record its first lift in average price since the middle of December at this week’s auction in New Zealand.

Dairy futures contracts for whole milk powder, the key dairy commodity traded on the GDT platform accounting for more than half of all sales, have jumped by almost 20% in the last fortnight pointing towards an improvement at this week’s auction.

April, May and June contracts for WMP offered by the NZX derivatives market, the New Zealand-based futures exchange, have been trading over the $2,100/t mark over the last week, which is 18.8% higher than where they traded this time two weeks ago.

At the last GDT auction, the index fell by less than 3% which came as a surprise to the market as a greater drop in the region of 10% had been anticipated.

WMP futures had pointed towards a drop in the region of 10% but the expected fall didn’t materialise giving some hope to the market. Given the improvement in WMP futures over the last two weeks, there is an expectation from some quarters that this week’s GDT auction could rise by as much as 10%.

However, according to market analysts from INTL FCStone, this fells like an overestimate, with the futures overeating to the better than expected result following the last auction and a currently strengthening US dollar. As such, FCStone is predicting a 1% to 3% increase overall in the GDT.