Futures market suggests today’s Global Dairy Trade could rise by 10%
There could be another bumper auction at today’s Global Dairy Trade, with New Zealand Bank ASB’s futures market pointing to another rise in dairy prices.
ASB’s futures market has suggested that prices at the auction could rise by over 10%.
Whole milk powder (WMP) appears to be the driver of this latest increase, with the futures market expecting a rise of between 12-15%.
Should today’s Global Dairy Trade auction rise by these suggested figures, it would be the second biggest consecutive price rise in dairy products this year.
At the last auction, two weeks ago, dairy product prices rose by 6.6% with WMP and rennet casein (RenCas) the main movers with a 9.9% and 16.3% increase respectively.
ASB had predicted that the last Global Dairy Trade would reflect dairy futures markets and post a strong increase in prices and that WMP could rise by between 5-7% (which it surpassed).
The three previous Global Dairy Trade auctions all held steady, with two auctions posting no increases or decreases in prices, while the other was down marginally at 0.4%.
Ornua PPI rises for the first time in 16 months
The positive Global Dairy Trade auction earlier this month was followed by a positive Ornua Purchase Price Index (PPI), the monthly indicator of market returns on dairy products sold by Ornua, which rose for the first time in 16 months.
The PPI rose to 81.8 points for July, up from the 81 points the index had in June.
The PPI had dropped significantly over the 14-month period from March 2015 to May 2015, from 101.2 points to 81 points.
Returns on dairy products stabilised in June with prices holding steady.