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Dairy product prices eke out gain

NZN 6/06/2017 Margreet Dietz

Dairy product prices have inched higher at Fonterra's GlobalDairyTrade auction, rising for the sixth consecutive time.

The GDT price index added 0.6 per cent from the previous auction three weeks ago and the average price up to $US3395 ($NZ4179). Some 22,004 tonnes of product was sold, up from 21,236 tonnes at the previous auction.

However, whole milk powder fell 2.9 per cent to $US3143 a tonne.

"Market expectations were for a weaker whole milk powder price, but WMP came back more than expected," AgriHQ dairy analyst Susan Kilsby said in a note.

The price of an August shipment of regular grade WMP fell 6.9 per cent, much more than the 3.1 per cent fall that was factored in by the NZX Dairy Derivatives market, she said.

"Milk output from New Zealand is expected to lift this season and Fonterra has already made a small upwards revision in the volume of whole milk powder expected to be sold on GDT next season."

At the latest GDT auction, cheddar jumped 14.5 per cent to $US4285 a tonne, while skim milk powder rallied 7.9 per cent to $US2156.

Cheddar posted its second highest gain since this commodity started trading on GDT in July 2011, Ms Kilsby said.

Butter milk powder climbed 5.8 per cent to $US2092 a tonne, while rennet casein gained 4.8 per cent to $US6849.

Butter rose 3.3 per cent to $US5631, while lactose advanced 1 per cent to $US971.

Bucking the trend, anhydrous milk fat slipped 1.2 percent to $US6569.

The New Zealand dollar last traded at US71.92 cents at 1.35pm in New York, compared with US71.39c at 5pm on Tuesday in Wellington.

There were 125 winning bidders out of 183 participating at the 16-round auction. The number of qualified bidders rose to 563, up from 553 at the previous auction.

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