Dairy commodity prices made small gains at Fonterra's overnight online auction, with the globalDairyTrade trade weighted index rising 1.6 percent, and the average winning price up to $US3594 ($NZ4796) from $US3522 a fortnight ago.For anhydrous milk fat, t
Dairy commodity prices made small gains at Fonterra's overnight online auction, with the globalDairyTrade trade weighted index rising 1.6 percent, and the average winning price up to $US3594 ($NZ4796) from $US3522 a fortnight ago.
For anhydrous milk fat, the trade weighted price rose 0.3 percent to an average $US5333, butter milk powder was down 2.7 percent at an average $US3034, skim milk powder lifted 0.5 percent with an average of $US3060, and whole milk powder (WMP) was up 2.6 percent at an average $US3556.
BNZ currency strategist Mike Jones described the overnight auction result as solid, saying prices rose despite headwinds from rising global dairy supply and a 3 percent bounce in the US dollar since the previous auction.
Last night former New Zealand academic Bill Bailey said a key factor analysts had been watching was the interest China continued to show for New Zealand WMP.
New Zealand provides almost 85 percent of all the WMP bought by China.
"If China slows or stops those imports, there will be a lot of WMP looking for a home with the associated negative impact on dairy prices," said Prof Bailey, who heads the agriculture department at Western Illinois University.
He said New Zealand production continued above last year's level, "but the question is how large is that margin".
"Some analysts are holding firm on their expectations of a production increase of 3 percent to 5 percent from last year," he said.
Others -- based on milk deliveries that are slightly below expectations and signs of a possible dry spring and summer in some dairying regions -- had moved their New Zealand production estimate down.
"With New Zealand weather continuing excellent and the anticipation of a long production season, most analysts, however, are leaning toward the 3 percent to 5 percent production increase estimate," he said.
