Analysts at ANZ explained that global dairy prices held broadly steady overnight, with the GDT-TWI easing 0.5%.
Key Quotes:
"This is the first fall (albeit small) for the year after prices had risen a cumulative 13% over the prior three auctions. The dip arguably reflects easing concerns over local milk flow as weather conditions turned more favourable. Whole milk powder (WMP) eked out a 0.3% gain, with an average price of USD3,246/tonne."
"The curve is remarkably flat. You wouldn’t say the cement is dry yet on Fonterra’s $6.40/kg MS milk price for the 2017/18 season, but with roughly 80% of the season’s product now sold, it is getting close to that point."
"Therefore, in many ways, attention is turning to how the 2018/19 season could go."
"We are a little mindful of prices easing further into May as the local production season has a strong finish, but still expect a USD2,800-3,200/tonne range for WMP to hold."
"But ultimately it is the recent strength in the NZD that could prove to be the real party pooper."
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