April, May and June contracts for whole milk powder (WMP) have been unsettled over the last week, leading to uncertainty as to what direction prices will move at Tuesday’s global dairy trade (GDT) event. At the close of trade in New Zealand markets (NZX) last Wednesday, futures prices for WMP had recorded a 5% rise in price from the weekend prior, which marked the largest price rise for WMP in over a month. By the following Monday, however, prices had returned to what they were for the same day of the previous week.
April, May and June contracts for whole milk powder (WMP) have been unsettled over the last week, leading to uncertainty as to what direction prices will move at Tuesday’s global dairy trade (GDT) event.
At the close of trade in New Zealand markets (NZX) last Wednesday, futures prices for WMP had recorded a 5% rise in price from the weekend prior, which marked the largest price rise for WMP in over a month. By the following Monday, however, prices had returned to what they were for the same day of the previous week.
Overall, this resulted in a rather unsettled week for WMP futures with total change of just +0.3% in the seven days.
The next GDT is due to take place on Tuesday 21 March and while never set in stone, the futures market for WMP can act as a decent bell weather for buyer sentiment in global dairy markets. This week’s futures market, however, provides a mixed forecast for this GDT event.
As can be seen from the red line in the graph below, the futures market price for WMP is currently falling and is approaching the price level of two weeks ago, which had marked the lowest WMP futures price in over five months.
At the last GDT, average prices paid for milk products fell by 6.3% with while the price of whole milk powder (WMP) declined almost 12.4% to $2,782/t.
On a positive note, Irish dairy has recently seen the resurgence of butter as a bright spot for farmers amid poor dairy prices. At the last GDT, butter and butter milk powder were the only two commodities to show a price rise, showing increases of 1.2% and 8.4% respectively while the latest EU export report shows Ireland was the second largest exporter of butter outside of the EU. With this in mind, the Irish dairy industry should hold one eye on the performance of butter at Tuesday’s GDT.
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