Analysis of the Latest GDT Auction
I'm finally catching up on the latest GDT auction analysis since I only got to my computer today to read the feedback from analysts and traders. However, it seems that globally nothing crucial was missed—there's a mass vacation season in the EU, and analysts from Oceania are also sparse in comments.
Maks Fasteyev
Dairy Project Partner at INFAGRO Ltd.
Dairy Project Partner at INFAGRO Ltd.
The last auction closed with an increase of 1.8%, which was somewhat unexpected, especially for the main product, whole milk powder (+2.4%).
Overall demand was better than average, particularly for fats or fat-containing products: butter, AMF (Anhydrous Milk Fat), SMP (Skimmed Milk Powder), and cheese.
China showed weak demand indicators for dry milk, both SMP and WMP (Whole Milk Powder): internal stocks in the country remain high, and demand is low, as evidenced by the current trend in the purchasing price of raw milk (more on this in a separate post).
On the positive side, Southeast Asia showed good results in the volume of SMP purchases, and we also note the "return" of the Middle East.
Regarding fats, the demand is strong across all regions, reflecting the overall positive market sentiment in recent weeks.
No sharp reaction from Europe has been heard yet, market liquidity is impaired due to a large number of vacations. We see a trend of gradual, modest growth, which was also relevant last week (at the same time, Eastern Europe is under pressure from a high supply of raw materials, balancing the overall situation).
Fresh forecasts from StoneX and Rabobank show a positive trend for the value of fats (primarily, butter) in the second half of the year. Considering the consensus about the current "bottom" for WMP, the overall prospects remain quite favorable. However, do not expect sharp changes; we lay out stable trends for the coming months.
Overall demand was better than average, particularly for fats or fat-containing products: butter, AMF (Anhydrous Milk Fat), SMP (Skimmed Milk Powder), and cheese.
China showed weak demand indicators for dry milk, both SMP and WMP (Whole Milk Powder): internal stocks in the country remain high, and demand is low, as evidenced by the current trend in the purchasing price of raw milk (more on this in a separate post).
On the positive side, Southeast Asia showed good results in the volume of SMP purchases, and we also note the "return" of the Middle East.
Regarding fats, the demand is strong across all regions, reflecting the overall positive market sentiment in recent weeks.
The fluctuations in Cheddar continue (+8%), with analysts attributing this result to high demand and prices for the product in the USA.
No sharp reaction from Europe has been heard yet, market liquidity is impaired due to a large number of vacations. We see a trend of gradual, modest growth, which was also relevant last week (at the same time, Eastern Europe is under pressure from a high supply of raw materials, balancing the overall situation).
Fresh forecasts from StoneX and Rabobank show a positive trend for the value of fats (primarily, butter) in the second half of the year. Considering the consensus about the current "bottom" for WMP, the overall prospects remain quite favorable. However, do not expect sharp changes; we lay out stable trends for the coming months.
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