Tomorrow’s Global Dairy Trade auction may post a second consecutive rise, the latest dairy futures market suggests.
Earlier this month, it posted its first rise of 2016 with dairy prices rising by 1.4% across the board.
New Zealand bank ASB has said that the current futures market trading hints that whole milk powder (WMP) may be up 7% in tomorrow’s auction.
Overall, tomorrow’s Global Dairy Trade auction could be up by between 1-5%, ASB suggests.
Of the five auctions so far this year, only one auction has posted positive results.
Two in a row? Dairy futures think so! Point to WMP up 7% & 1%-5% overall @ this week's auction #greenshoots ^NP pic.twitter.com/UhGLdSi6zn
— ASB Markets (@ASBMarkets) March 14, 2016
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Meanwhile, last week, Fonterra cut its forecast Farmgate Milk Price for the 2015/16 season from $4.15 per kgMS to $3.90 (€2.39)/kgMS or the equivalent of 17.35c/L.
When combined with the forecast earnings per share range of 45-55 NZ cents, this means a total forecast available for payout of $4.35-$4.45/kgMS.
This would currently equate to a forecast cash payout of $4.25-$4.30/kgMS for a fully shared-up farmer after retentions.
Chief Executive Theo Spierings said dairy exports and imports had been imbalanced for the past 18 months due to European production increasing more than expected, and lower imports into China and Russia – the two largest importers of dairy.
“Our forecast is based on no significant changes to either supply or demand globally before the end of the year.
“However, a reduction in the supply available for export before then could mean prices recover earlier than currently expected.”