GDT price fall reflect slightly less bad than expected 16/17 NZ output forecast
The GDT auction earlier this week saw a 3.2% weighted average price fall for the commodities, which are up for sale through monthly contracts for the period March to August 2017. WMP is always the most influential product, because the most traded product through the auction, and it saw its average price fall by 3.7% compared to the previous auction. SMP fell by 3.8%.
However, butter held its own at +0.2%, and it is clear that butterfat continues to be the most buoyant product on global dairy markets in the last 12 months or so.
This week’s downturn in the GDT auction reflects a revised output forecast by Fonterra for the 16/17 season from a 7% fall to a very slightly more modest 5% fall. This was because of slightly more favourable rainfall in recent weeks, and a better than expected performance in January milk production (+0.8%) so that the June to January season total todate is now 2.88% down on the same period last year, well down on the June to November result of 3.71%.