Dairy product prices rose for the first time since February in the latest GlobalDairyTrade auction, paced by butter milk powder, as buyers found value after the recent slide in prices.
Expanding global milk supply and a drop in buying by Chinese importers as they run down inventories has weighed on dairy prices this year, although lower prices are now starting to entice other buyers back into the market, according to Rabobank's Agribusiness Monthly, released yesterday. Supply won't abate soon though, with figures for New Zealand's 2014 season expected to show record milk production.
The GDT price index advanced 0.9 percent to US$3,807 a tonne, the first gain after eighth consecutive declines. Some 31,984 tonnes of product was sold, down from 37,012 two weeks ago.
In the latest GDT auction, butter milk powder surged 17 percent to US$4,535 a tonne, and rennet casein added 4.6 percent to US$11,155 a tonne. Whole milk powder rose 2.4 percent to US$3,658, while cheddar gained 2.4 percent, rising to US$4,381 a tonne.
Butter increased 1.8 percent to US$3,699 a tonne.
Anhydrous milk fat slid 3.8 percent to US$3,898 a tonne, while skim milk powder slipped 0.2 percent to US$3,855 a tonne.
Milk protein concentrate and lactose weren't offered at the event.
Ahead of the release of the latest GDT data, the New Zealand dollar was trading steady at 86.75 US cents at about 12:30am Auckland time. After the release of the latest GDT data, the kiwi slid as low as 86.43 cents and recently traded at 86.49 cents.
The US dollar advanced against most major currencies after a report showed consumer prices rose faster than expected last month as Federal Reserve policymakers began a regularly scheduled two-day meeting in Washington.
There were 124 winning bidders out of 193 participating bidders at the auction over 15 rounds. The number of qualified bidders was 690, down from 738 two weeks ago.
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