18 April 2012

2 minute read

The average GDT skimmed milk price (SMP) price for contracts through December 2012 dropped sharply to $2,871/MT, or $1.34/ lb., a price level not seen since August 2010; however, this is still well above current US non-fat dry milk (NDM) low end prices at $1.125/lb. to $1.13/lb.

The GDT SMP Contract 2, for June 2012 deliveries, posted the largest price decline, down 8.4 per cent from the prior auction suggesting concerns over growing milk supplies in the United States and Europe as both head into their peak production season.

The GDT average whole milk powder (WMP) price dropped 11.0 per cent from the prior auction to $2,847/MT, or $1.29/ lb.. The GDT WMP price is well below European prices, less than the current GDT SMP price, and at the lowest GDT WMP price level since August 2009.

After making its début at the last GDT auction, lactose was conspicuously absent from yesterday’s auction. The lack of lactose may provide some insight into the continued strength of this market.

The CME Cheddar block price was bid 0.25¢ higher and closed at $1.4900/ lb. with no trades. The CME Cheddar barrel price was unchanged at $1.4600/ lb. after an active session with 10 trades. Both CME spot butter and Grade A NDM prices settled unchanged at $1.4250/ lb. and $1.1775/lb., respectively on no trades. CME Extra Grade NDM settled down 1.0¢ to $1.1575/lb. on an offer.

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