Milk prices at the GlobalDairyTrade auction bounced back, as
concerns about waterlogged pasture in New Zealand encouraged buying.
The GlobalDairyTrade index, which is based on prices at
auctions held by New Zealand dairy cooperative, rose by 3.1% from the last even
held two weeks ago, and is now at its highest level since mid-February.
Prices are being supported by ideas that a spate of
hurricanes in New Zealand, the world's top dairy exporter, would reduce the availability
of pasture and slow production.
"The market is eyeing very wet soils on New Zealand's North
Island created by the heavy rain from Cyclones Debbie and Cook," said Tobin
Gorey, at Commonwealth Bank of Australia.
"How much production is lost remains an open question," Mr
Gorey said. "The market is priced like it will be a problem."
New Zealand's North Island was drenched by the remains on
Cyclone Debbie two weeks ago, and has just received more wet weather from
"The deluge of rain could slow grass growth and so dent late‑season milk production,"
Mr Gorey warned.
Skim-milk prices soar
Benchmark whole milk powder prices rose for the third
straight session, up 3.5% from the last event, to their highest level since
Skim milked powder prices bounced back by 7.1%, although much
of this support will have come from the fact that prices fell sharply over the past
three auctions, turning a heavy premium to EU prices to a deficit.
Cheddar and butter prices also rallied, while prices for
rennet casein eased.