Second April GDT auction 2021: -0.1% not quite maintained - level remains high

2. GDT auction in April 2021: price level reached not quite asserted.

The second April 2021 auction of Global Dairy Trade (GDT) could not quite maintain the price level reached so far with an average of -0.1%. Normal butter experienced the biggest setback and had to give the increase in Vorauktion again. The turnover amounts are in accordance with the usual seasonal development changed little small failed. Whole milk powder (VMP) only reached + 0.4% on average. The month of Aug.-21 had to give back half of the surcharges from the pre-auction. In contrast, the October 21 price of + 1.7% was able to compensate for the decline at the last auction. The absolute prices of $ 4,097 / t remain at the top level in a multi-year comparison. Skimmed milk powder (SMP) has been able to maintain the price level reached on average.Weak results in the summer months were due to the outstanding surcharge in Oct with + 2.4% . At $ 3,365 / t, the SMP prices are still at a high level compared to the EU ($ 3,079 / t) and the USA ($ 2,588 / t). With an average of -3.3%, pure butter has had to cut back on the price level it has reached so far. What is striking are the high discounts in the first few months, with a focus on May, at -5% . The average product price drops to $ 6,003 / t, but remains at the top level (see graph). With an average of -0.6%, normal butter had to give up a small part of its upswing in the pre-auction. With the exception of the delivery month Sep.-21, prices were reduced between -0.3 and -1.4% in the other delivery months. The absolute butter price is fixed at $ 5,736 / t in the category of maximum prices. EEX Leipzig is quoting the equivalent of $ 5,001 / t and Chicago prices are $ 3,968 / t.  The latest auction results are still in surprisingly stable shape given the usual seasonal weakness. The availability of dairy products is limited, especially in Asia. In the EU and the USA, the quotations are clearly lagging behind. The milk season is coming to an end in the southern hemisphere. In the northern hemisphere, one usually expects a seasonal increase in delivery. As you can see from the forward rates of EEX-Leipzig, the usual price low in the summer months will hardly have an impact. The quotations continuously show firm to rising tendencies. Forward rates at EEX Leipzig (as of April 19, 2021)