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It is exactly two months ago since New Zealand whole milk powder (WMP) futures hit their lowest point in over six months, as valuations fell to $2,585/t. Just over eight weeks on from that, valuations for the same product are currently at $3,150/t – a remarkable 22% rise.
While futures prices only represent a contractual valuation on a product, as opposed to a physical purchase and movement of a product, these values can still be used as a strong indicator for physical prices in the market – most notably at the Global Dairy Trade (GDT).
March and April’s rising WMP futures prices have been replicated in the strong performances of WMP at recent GDT events. The GDT takes place every two weeks. At the most recent trade, the price index recorded an increase of 3.6% – its fourth consecutive rise.
WMP prices at the trade jumped 5.2% to $3,233/t, while skim milk powder (SMP) prices fell marginally by 0.9% to $1,982/t.
Butter has become an important commodity for the Irish dairy industry in recent months, with Ireland emerging as 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 1.1% to $4,911/t and butter milk powder (BMP) surged 21.8% to $1,859/t.
As can be seen from the graph below, the GDT price index for WMP has replicated the recent strong performances of WMP futures.
This week, WMP futures prices recorded a 2% rise, with a high of $3,205/t being recorded on Wednesday. This rise could suggest a fifth GDT increase is on the cards.
The next GDT auction will take place on 16 May and next week’s futures prices will give a stronger indication as to the direction of prices at the trade.
Dairy Markets: futures hit two-month high
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