The future looks somewhat more encouraging for powder, however, with spot quotes rising for the last 3 weeks, and having again broken through the €1600/t mark in Germany, France and the Netherlands.
Interestingly, too, bearing in mind the importance of whey in most of our milk processors’ product mixes, average whey prices and spot quotes have also been rising over recent weeks.
Finally, European futures for SMP published today (15/11/18) suggest an expectation of SMP price recovery in 2019 to levels between €1700-1800/t. Fast reducing SMP intervention stocks may influence this even more positively over the coming weeks and months, however.
On the same date, SMP trading on the NZX futures for the period January to April 2019 has sold for prices between US$2080-2175 (€1840 to €1924 at today’s exchange rates).
GDT – a bit of context
Much has been made of the fact that we’ve had 6 consecutive negative GDT auctions in the last 3 months. However, since last August, the SMP prices has actually improved by US$50/t, to nearly US$2000 (€1770).
Also, the quantities on offer in any one auction tend to be a very small fraction of international trade. The table below outlines the quantities which are expected to be made available for sale at the next auction on Tuesday 20th November. While WMP is as usual the product of which the largest quantities are traded, most other products are traded in much smaller volumes.
For context, GDT traded 654,000t of all products combined in 2017. For the same year, total dairy exports (all products) out of New Zealand amounted to 3.26m tonnes; exports of cheese, SMP, WMP and butter from the EU to 2.14m tonnes and 1.94m tonnes from the US.
Source: INTL FCStone based on Fonterra
CL/IFA/15th Nov 2018