GDT Auction of 4 June 2019 at -3.4% - Butter Prices Have Melted Much The 2-week auction of the Global Dairy Trade under the leadership of the New Zealand Dairy Fonterra delivered after months of positive results now the seasonally usual price reduction of - 3.4% for pre-auction. The result 14 days ago was already in the slightly negative range. One reason could be the increased trading volume of 19,874 t, up 28%. But the results are different for each component. Whole milk powder (VMP) still performed comparatively moderately at -1.5% on average in all delivery months. The individual delivery dates showed only limited fluctuations, only the Sep-19 fell with -3.3% from the frame. Since China is the largest importer, it can be assumed that the import requirement was not so urgent. Skimmed milk powder (MMP) has fallen back to its previous level after the previous price increases.The average price declines of -4% are mainly attributable to the weak months of Sep.-19 at -7.7% and Oct.-19 at -4.3%. In anticipation of rising milk deliveries in the fall months in New Zealand, buyers have held back a little more. Nevertheless, the EU intervention price level will not be undercut. Pure butter fat contributed strongly to the overall result with an average of -5.7% . The sharpest fall of -9.9% was the Jul.-19-Date, which has corrected the unusually high increase in the pre-auction. But even the months of Sept, .19 and Oct, .19 have suffered significant discounts. The high price level of normal butter achieved in the April auctions can no longer be sustained. With an average of -10.3% , the previous highest price level was considerably reduced. The fall months are again striking with price reductions of more than -10%.On the one hand, the auction results reflect the seasonally high level of milk production in the northern hemisphere, but already anticipate rising milk deliveries in the southern hemisphere from the end of July. Usually, the production peak of New Zealand is expected in Ok.-19 . Buyers can now sit back and relax in the assessment that the NZ supply in the autumn months will rise again soon. Hopefully, they have also taken into account the critical situation in Australia that once again suffers from drought.
