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World 05.02.2024

European Dairy Bounces Back, Oceania Faces Headwinds - Insights from StoneX Analyst Lu Shi

Source: The DairyNews
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In a week marked by divergent movements in the European and Oceania dairy markets, both European butter and Skimmed Milk Powder futures rebounded strongly from significant losses in the previous week.
European Dairy Bounces Back, Oceania Faces Headwinds - Insights from StoneX Analyst Lu Shi
Conversely, Oceania witnessed declines in Whole Milk Powder and Skimmed Milk Powder futures, as highlighted by Lu Shi, Market Intelligence Analyst at StoneX Group Inc., in her LinkedIn update.

European prices are buoyed by several supportive factors. Recent weekly collection reports from leading milk-producing countries indicate that milk production is still contracting. Additionally, Christmas consumption rebounded remarkably across major countries, alleviating the cost of living crisis as slashed energy prices played a role.

However, Oceania presents a contrasting scenario, with the supply side proving stronger than expected despite adverse weather conditions in New Zealand from December to the third week of January. New Zealand's milksolid production has surged by +2.6% year-on-year, and Australia has seen a +2.2% year-on-year increase. December's New Zealand exports, however, show weakness following robust numbers in October and November.

As the GDT auction 349 approaches Tuesday, 6 February, today's settlement prices of SGX futures indicate a +1.9% rise for the overall index. Despite SGX future prices consistently holding a premium over GDT forward prices, the market outlook remains dynamic.

Explore our comprehensive dairy market intelligence platform - StoneX Plus, for access to historical databases, in-depth analysis, forecasts, and reports.
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