- GDT Auction in May 2022: - 2.9%
The second May 2022 Global Dairy Trade (GDT) auction delivered another, but this time less sharp, drop in average auction results. Whole milk powder was particularly affected. The trading quantities are low, as is usual for the time of year. Whole milk powder (roughly 50% auction share) had to accept a renewed discount of 4.9% compared to the pre-auction. The Conspicuous Months Sep. and Oct.22 represent a further correction of the pre-auction. The price declines are mainly due to the Covid-related decline in demand in China. The absolute prices decrease to $3,934/t, but still remain at a comparatively high level. Skimmed milk powder (SMP) (share 25%) was not quite able to maintain the result of the pre-auction with -0.6%. The price decline has been slowed down significantly. However, the listings remain in the high price range of the last 5 years. The monthly results show little difference. The absolute MMP prices only reach 4.$116/t, moving below the EEX rates ($4,252/t) but above the US ($3,979/t). Butterfat prices (share 10%) were able to achieve slight gains after a poor result in the pre-auction. The strong forward delivery dates have provided the tipping point. The average product price increases to $6,043/t but still remains in the above-average range of the last 5 years. Normal butter (share 8%) has to accept moderate price reductions of -1% for the pre-auction. Prices reset in all delivery months with little difference. The absolute butter price falls back to $5,750/t but still remains in the upper mid-range of the last 5 years. EEX Leipzig is quoted at the equivalent of $7,560/t and the Chicago rates are at $5,997/t. The seasonally usual summer weakness of the recent GDT auctions is exacerbated by the Covid-related restrictions of the main buyer China. In view of the high price level, price sensitivity has increased.
