Dairy markets: futures hit two-month high

Last Tuesday’s Global Dairy Trade (GDT) event saw a third consecutive rise for milk product prices.

With the price index increasing by 3.1%, to an average price of $3,139, this is the first time three consecutively-positive events have been recorded since last December.

With GDT prices gathering momentum, futures prices have also followed trend. Whole milk powder (WMP) futures have climbed 3% in the last two weeks - even without three days of trading over the long Easter weekend.

At the GDT in New Zealand, the price index for whole milk power (WMP) increased by 3.5% with an average WMP price of $2,998, while prices for skim milk power (SMP) were up by 7.1%, with an average weighted price at $2,044.

The Irish dairy industry has seen the resurgence of butter as a bright spot for farmers, with Ireland recently becoming the largest exporter of butter in the EU. This positivity will be further boosted by the commodity’s latest showing at the trade, where it climbed 2.9% to $4,892.

Supply

On the supply front, collections in the US and the UK are up. US milk collections in March totalled 8.49m tonnes, an increase of 1.68% on the same month last year. The rise also represented the largest monthly volume of milk ever collected in the US in a single month, exceeding the previous record of 8.44m tonnes set last May.

In the UK, weekly collections data have shown UK production moved into positive territory for the first time in over a year. In the week ending 05 April, collections totalled 301,000t, a rise of 1.09% on the same week last year.

As can be seen from the graph below, futures prices followed the GDT price index climb to reach a two-month high.

The next GDT auction will take place on 02 May and next week’s futures prices will give a strong indication as to the direction of prices at the trade.

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