GDT auction Dec 17, 2019: - 5.1% for weak butter fats also a rough setback for milk powder The second Dec. 2019 auction of the Global Dairy Trade (GDT) has the mostly positive results with an average result of -5.1% of the pre-auctions canceled. At 35,748 t, sales were down on the previous month. Whole and skimmed milk powder were the two big losers. Whole milk powder (VMP) was no longer able to assert itself after the stable results in the pre-auctions and had to accept a strong setback of -6.7%. The results were poor in all delivery dates. Since China is the main buyer, it can be assumed that demand from this country has been particularly weak. The end of the year may also play a role. Skimmed milk powder (MMP) had to cancel its price increase of the past few months with a setback of -6.3%. MMP quotations again fell below the multi-year average price of $ 3,000 / t. Nevertheless, the long phase of low prices has been overcome.The results remain in the low minus range in all delivery dates. MMP prices are closely based on the VMP quotations. Pure butter with -0.3% could not quite keep out of the already reduced level of the pre-auction. The redemptions in month Jan-20 were particularly serious with -3.9%, while other months also moved in the plus range. Nevertheless: Compared to the 5-year average, the courses are still in the good midfield. Normal butter received a strong damper for the 6th time at -2.4% on average. The high price discount in the delivery month of January 2020 is striking at -5.3%, while the other dates suffered less severe setbacks. Nevertheless, the butter prices are still in the good midfield. The current auction results are to be assessed against the background of the tight deadlines before the holidays and the turn of the year. A fundamental change in trend can hardly be derived from this. What is striking is the clear price reductions for whole and skimmed milk powder, which have recently raised hopes.The decline in sales is in the usual seasonal frame. In the United States , butter futures prices in the first half of 2020 are in a slight upward trend, with the exception of January. This can also be observed for the MMP courses. The US milk prices are currently at the high price level of the equivalent of just under 42 ct / kg . Also in New Zealand and Australia there are reports of rising prices that reach into the 1st half of 2020. The forward prices for butter and MMP in the 1st half of 2020 are listed on EEX – Leibzig with a steady upward trend.
