The result from
last week’s GDT auction was the signal dairy markets have been waiting for. While world market quotes for butter and cheese have been improving since early May, this week’s GDT was the first real indication of an upward swing in milk powder prices.Although prices have a long way to recover, the near 10% jump in the average selling price of whole milk powder (WMP) at last week’s GDT to $2,265/t gave dairy markets the kind of positive kickstart not seen in almost a year.
The result from last week’s GDT auction was the signal dairy markets have been waiting for. While world market quotes for butter and cheese have been improving since early May, this week’s GDT was the first real indication of an upward swing in milk powder prices.
Although prices have a long way to recover, the near 10% jump in the average selling price of whole milk powder (WMP) at last week’s GDT to $2,265/t gave dairy markets the kind of positive kickstart not seen in almost a year.
On the back of this, futures prices for whole milk powder have soared in the last week with September, October and November contracts for WMP jumping by more than 7% since last Monday.
WMP futures have now risen by more than 12% in the last fortnight as market sentiment for milk powders improves. While WMP prices appear to have turned a corner and finally have some much-needed upward momentum, the outlook for skimmed milk powder (SMP) remains challenging.
Although SMP prices lifted by 2% at last week’s GDT auction, average prices remain very close to intervention levels as massive overhanging global stocks of the powder commodity weigh on markets.
In Europe, close to 250,000t of SMP is sitting in intervention storage, while the US market is also oversupplied in skimmed powders.
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