Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Rabobank commentary - GDT Event 15 May 2018

Rabobank commentary - GDT Event 212 | 15 May 2018

Rabobank dairy analyst Emma Higgins on the latest GDT Event

The final GDT Event for the 2017/18 production season ended with the GDT Price Index up almost 2% to USD 3,637/tonne.

SMP cracked the USD 2K mark (USD 2,047/tonne) and WMP results were slightly up (+0.2% to USD 3,226/tonne). Oceania SMP still priced ahead of US and EU priced product. Fats continue to fly high, with AMF up almost 6% to USD 6,354/tonne and butter 2.4% to USD 5,787/tonne. Europe is short on fats with a delay in spring production and so low volume is helpful for Oceania price support.

As we flagged last GDT Event, we are moving into the quieter months for NZ production and therefore fresh product for the GDT. Any major price movements will be influenced by the urgency of buyers looking to obtain product prior to the new season.

Some factors for the New Zealand dairy sector to consider as we move into the new production season include:
• Competitive currency changes in the Euro. With European spring production starting to lift in places, a weaker Euro will be helpful for EU exporters to looking to offload product. German milk production has moved ahead for 2018 v 2017, while French milk production is struggling to gain traction on last year.
• The recent weakness in the Kiwi dollar is also helpful for exporters. In terms of impact on the milk price, the weaker currency will have a greater effect on next season’s milk price (2018/19) than this season's. Our milk price forecast of NZD 6.40/kgMS is based on 72c (spot at the time of calculating).
• Another EC SMP tender of intervention product has been held. Hopefully the results (once released, potentially on Friday) show more aged product moving out of warehouses, which will help to see the gap between fresh SMP and old continue.
• Brexit will see some changes to the EU budget and so there could be a resulting change to the support payments that EU farmers receive. At this stage, there is a proposal for a cut of 4% to direct payments for EU farms for the period 2021-2027.



© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

EU Wine Exports: Peter Yealands Fined For "Unprecedented Offending"

Yealands Estate Wines has pleaded guilty to “unprecedented offending” under the Wine Act 2003 and has copped a $400,000 fine. More>>

ALSO:

Discussion Paper: Govt To Act On Unfair Commercial Practices

“I’ve heard about traders who have used aggressive tactics to sell products to vulnerable consumers, and businesses that were powerless to stop suppliers varying the terms of their contract, including price.” More>>

ALSO:

'Considering Options' On Tip Top Ownership: Fonterra Drops Forecast Milk Price

Fonterra Co-operative Group Limited today revised its 2018/19 forecast Farmgate Milk Price range from $6.25-$6.50 per kgMS to $6.00-$6.30 per kgMS and shared an update on its first quarter business performance. More>>

ALSO:

Science: Legendary Telescope Being Brought Back To Life

One of the world’s most famous Victorian telescopes will be restored and available for public viewing in Takapō after spending five decades in storage... The Brashear Telescope was used in the late 1800s by Percival Lowell for his studies of Mars. More>>