Global Dairy Trade auction lifts 3.1% — second rise in a row
Whole milk powder led the gains as North Asian buyers restocked. Two banks flag upside to farmgate forecasts if it holds.
The fortnightly Global Dairy Trade auction closed up 3.1 per cent overnight, the second consecutive rise, with whole milk powder up 3.8 per cent and butter posting its strongest result since February.
The move was led by North Asian buying, which analysts read as restocking ahead of the southern-hemisphere production trough rather than a structural demand shift. Volumes offered were slightly down on the previous event, flattering the result at the margin.
For New Zealand suppliers, the result firms the case for mid-range farmgate forecasts holding, with two banks flagging upside to their current-season numbers if the next two events hold gains. Canterbury and Waikato budgets built on conservative payouts have a little more air in them this morning.
European spot markets echoed the firmness in butterfat but not in powders, keeping the fat-protein spread wide. For farmers supplying liquid or manufacturing milk on component-based contracts, the message from advisors is consistent: know which components your cheque actually rewards this season, because the spread is doing unusual work.
The next auction lands in a fortnight; the futures curve is pricing modest further gains.
By RFT Markets Desk