First Dec.-18 GDT Auction with an average of +2.2% - Downtrend stopped for the time being?
The last 12 auction results of the Global Dairy Trade (GDT) consistently yielded more or less large / small reductions in the price of dairy products. For the first time, the first Dec-18 auction saw an increase of +2.2% on average for all delivery dates and dairy products. Is this the end of the slump in international milk prices or just a stopover?
In any case, the significantly reduced handling volume of 36,450 t indicates that the previous high trading volumes were no longer available.
The results for the individual dairy products varied.
Whole milk powder (VMP) achieved an increase of +2.5% on average over the next 6 delivery months. With the exception of the falling months of May and June, quotes were raised from +2.2% to +3.5%. This could be a first sign of consolidation of the courses just under average level have been set.
Skimmed milk powder (MMP) is able to maintain its low level with an average result of +0.3%. However, the weak Jan. 19 deadline, at -5.2%, indicates that there is still plenty of MMPs left in the supply warehouses at world level.Also the results of the following delivery months do not indicate a convincing upward trend.
Butterfine scored the best with an average of + 3.9%. However, the setbacks in the pre-auctions were also particularly strong. The last two months of May and June 2019, however, brought significant cuts, which may be associated with a supply high during this period. In the end, the prices are still well above the multi-year average.
Normal butter was largely positive except for the months Jan. and Jun. 2019. Above-average surcharges were achieved by the delivery dates from February to April 2019. Butter prices are only just above the long-term averages. The current results may be seen as a sign of price stabilization.
For further development, it should be noted that the upcoming milk deliveries in the northern and southern hemisphere have taken their usual seasonal decline . This development will last until Apr./ May 2019, when milk production in the northern production areas is expected to increase again. However, this seasonal increase could be less than usual due to the food shortage in Europe . In the southern hemisphere delivery continues until July.
The last GDT auction this year will take place on 18 Dec.2018.
