GDT lift belies a wobble in the dairy market recovery
Futures markets and spots had been easing in recent weeks, in response to a multitude of factors: political uncertainties linked to Brexit, the election of Trump and its impact on global trade, and expectations of political instability in Europe with major elections in France, the Netherlands, Germany, Hungary and elsewhere. The large SMP intervention stock the EU seems unable to shift and the closing of SMP APS at the end of this month were two more factors mentioned by analysts.
However, today’s GDT surprised all commentators who expected a potentially significant price fall in powders and butterfat. In fact, the weighted average price rose 1.3%, with WMP up 1%, SMP more or less unchanged at +0.1%, butter up by 4.9% and AMF (butteroil) up by 4% – clearly showing that the buyers on the virtual auction floor realised that milk scarcity remains an issue globally!