At the last GDT auction held almost a fortnight ago, WMP prices recorded a decline of 1.7% in average selling price to just over $2,200/t. However, despite this decline, the price of WMP futures contracts has remained steady in the intervening period and actually increased by a modest 1.5% in the last week ahead of the next GDT auction this Wednesday.Accounting for the bulk of milk utilisation in New Zealand, WMP prices have a significant say on farmgate returns and are the principal driver behind the performance of the GDT index.
At the last GDT auction held almost a fortnight ago, WMP prices recorded a decline of 1.7% in average selling price to just over $2,200/t. However, despite this decline, the price of WMP futures contracts has remained steady in the intervening period and actually increased by a modest 1.5% in the last week ahead of the next GDT auction this Wednesday.
Accounting for the bulk of milk utilisation in New Zealand, WMP prices have a significant say on farmgate returns and are the principal driver behind the performance of the GDT index.
Whether this marginal increase in WMP futures signals another slight lift in the GDT is hard to say as dairy markets remain extremely tentative at present, particularly on the demand side of the equation. The recent lift in oil prices should help a recovery in demand from oil economies but, overall, the supply side remains out of balance with demand.
In Europe, member states place more than 36,300t of skimmed milk powder (SMP) into intervention last week as demand for milk powders is unable to keep pace with the huge supplies in the market right now.
The volume of SMP offered for intervention last week by EU member states was the largest in any single week so far this year, with Ireland offering the fourth largest amount behind France, Germany and the Netherlands.
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