GDT Event 395: Bearish sentiment persists despite futures uptick

Since the previous Global Dairy Trade (GDT) event, market sentiment has remained bearish. Event 395 may provide further directional signals, while international futures markets have trended negatively in the US, the EU, and SGX (to a lesser extent). From a supply perspective, 2025 shaped up to be a record year for milk production. The main producing and exporting regions, New Zealand, the US, and the EU, have recorded a combined year-to-date (YTD) increase of 3.45 billion kilo through October.Compared with the winning prices of the previous GDT auction, calculations based on SGX futures indicate potential upside if GDT results align with futures pricing, under both the “all contracts” and “C2” methodologies.Key market insightsNew Zealand milk production: YTD November milk production is up 1.76%, equivalent to an increase of 333 million kilo.SGX dairy futures: Overall market sentiment has weakened in recent weeks, except for New Zealand dairy futures. Average prices for all fat-based commodities declined compared with Event 394 winning prices, while SMP and WMP futures moved higher relative to the average winning prices (AWPs) of Event 394.Volumes and products: With the new season underway, offered volumes remain substantial but declined compared with GDT Event 394. Total auction volume for Event 395 is 26,938 tons, down 18.95% versus the previous event, despite the inclusion of BMP in today’s auction.Exports: YTD exports through November 2025 are down 0.27%, or approximately 50 million kilo in liquid milk equivalent terms.Expected price impact: If Event 395 results align with SGX futures, the GDT price index could decline by 3.6% under the “C2” method and by 4.0% under the “all contracts” method.Composition of volumes: Whole milk powder dominates the offering in Event 395, accounting for 57.87% of total volumes. Price movements in this category will therefore have a significant impact on overall market sentiment and the GDT index.Global outlook: Dairy futures in the US and the EU have continued a downward trajectory, while SGX futures have shown a modest uptick in recent trading sessions.Futures development: Since the last GDT event, average futures prices (C1–C6) have moved lower compared with the AWPs of Event 394, apart from SMP and WMP. AMF -3,10% SMP 8,43% Butter -2,12% WMP 4,61% In summary, GDT Event 395 presents a mixed outlook. While futures markets point to a potentially more bullish outcome, conditions in the physical market suggest downside risks remain dominant.