#Dairy Prices Bounce Back at Auction

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International milk prices resumed on the upward path as a surge in whole milk powder values ensured dairy prices return to gains at the November 16th GlobalDairyTrade auction.With October being viewed as “providing a litmus test for dairy markets” according to Rabobank, this auction’s results were watched with particular interests.
Fonterra’s Global Dairy Trade-Trade Weighted Index, which covers a range of 30 products and contract periods on offer, rose 1.8 percent to an eight-month high, with an average selling price of $3,399 per ton. It followed a 0.9 percent fall at the previous auction two weeks ago, which had been the first fall since mid-July.
Whole milk powder prices climbed 9.2% to $3,421 a ton, their strongest gain since March 2011, to reach a seven-month high, with values of contracts for nearer-term delivery proving especially strong.
The gains in what is the biggest product, by volume, sold at the auction offset declines in many other contracts, including cheddar, the price of which tumbled by 9.9%.
The data come at a sensitive point in dairy markets, after a slowdown in milk output in producers such as the European Union and the US supported northern hemisphere prices, creating a gap with values in the big southern hemisphere exporting nations.
In these southern hemisphere nations, such as top exporter New Zealand, where GlobalDairyTrade is based, values have been depressed by the prospect of the spring flush in milk production as cows are put out to pasture.
Many hope the results of this auction will assist in revealing the ability of demand to cope with this higher output, besides the degree to which northern hemisphere prices can maintain their relative strength.
In fact, the auction ironed out one anomaly of recent auctions, in returning whole milk powder to a premium over skim milk powder, which rose only 0.8% at the event.
Skim milk powder, while in theory the less valuable product, had since August held a premium, which many commentators have attributed to a switch in demand from China, a major dairy importer.
Anhydrous milk fat (AMF), as used in foods from ice cream to cakes, sprung «arguably the biggest surprise» at the auction by falling 3.2%, analysts at Agrifax, the New Zealand-based consultancy, said.
«Anhydrous milk fat has been trading at significantly higher levels outside of GlobalDairyTrade, so many market participants were expecting AMF values to rise at the latest auction.»
The latest sale marks the fifth in six where prices have gained and pushes the GDT-TWI price to the highest since March this year.
Of the products that fell, cheddar dropped 9.9 percent to $2,990 a ton while anhydrous milk fat fell 3.2 percent. The total volume sold fell to 52,828 tons from 59,307 two weeks ago.
There were 134 winning bidders over 15 rounds. There were 178 participating bidders out of a total number of qualified bidders of 725.
The next auction will be held on November 6th.
Source: AgriMoney

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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