Dairy product prices rise though outlook subdued
Sentiment improves and prices rise.
UPDATED: Fonterra not seen meeting its payout forecast despite latest GDT gain
Dairy product prices rose in the latest GlobalDairyTrade auction amid an improvement in market sentiment and rebounding from three consecutive drops.
The GDT auction average winning prices rose 3.6% to $US2419, from $US2345 at the previous auction two weeks ago, and gaining for the first time since the October 6 auction.
Some 28,158 tonnes of product was sold, down from 30,044 tonnes two weeks ago.
The AgriHQ 2015-16 Farmgate Milk Price gained 21c to $4.48 per kilogram of milk solids. This is comparable with Fonterra's current 2015-16 milk price forecast of $4.60/kgMS.
Whole milk powder prices made considerable gains on the NZX Dairy Futures market over the past fortnight, with the nearby contract lifting 8%.
That sentiment flowed into GDT auction prices, according to AgriHQ dairy analyst Susan Kilsby. However, excess supply will keep a lid on prices.
"While we have seen a solid lift in prices at this auction, market fundamentals still remain weak due to the sheer volume of milk that is being produced across the globe," Ms Kilsby says. "Therefore any recovery in prices is likely to occur slowly."
Butter rose 5.7% to $US3009 a tonne, while whole milk powder increased 5.3% to $US2260 a tonne. Skim milk powder rose 3.2% to $US1918 a tonne, and anhydrous milk fat added 2.3% to $US3519 a tonne.
Lactose was 1.7% higher at $US507 a tonne.
Cheddar fell 1.5% to $US2829 a tonne, rennet casein declined 4.3% to $US5046 a tonne, while butter milk powder dropped 5.6% to $US1729 a tonne.
The New Zealand dollar last traded at 66.75USc at 11.22am in New York, compared with 65.8USc at 5pm in Wellington the previous day.
There were 121 winning bidders out of 161 participating bidders at the 15-round auction. The number of qualified bidders rose to 613, up from 609 at the last auction.
(BusinessDesk)
Margreet Dietz
Wed, 02 Dec 2015
Wed, 02 Dec 2015
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Dairy product prices rise though outlook subdued
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