GDT event 399: Futures indicate potential upside

Since the previous Global Dairy Trade (GDT) event, market sentiment has remained largely firm across most products, except for SMP. Event 399 may provide further direction to the market. Over the past week, international dairy futures markets have generally moved higher.Compared with the winning prices of the previous GDT auction, calculations based on SGX futures indicate a likely upward movement if GDT results align with futures pricing under both the “C2 contracts” method and the “all contracts” method.Key Market InsightsNew Zealand milk production: Year-to-date (January) milk production is up 2.45%, equivalent to an increase of 65 million kilo. This compares with a 2.40% increase reported in December. Total YTD January production stands at 2,442,000,000 kilo.SGX dairy futures: Market sentiment has generally strengthened over the past week for NZ dairy futures. However, WMP C1–C4, SMP C1–C2, C4 and C5, and AMF C1 and C5 recorded declines.Volumes & products: As the NZ season approaches its end, offered volumes declined sharply for this event by 15.83%, or 3,036 tons. Total auction volume stands at 16,148 tons.Exports: Year-to-date (January 2026), exports are down 4.80%, equivalent to a decline of 105 million kilo LME.Expected price impact: If Event 399 results align with SGX futures, the GDT Price Index could increase by 3.30% under the “C2” method and by 2.5% under the “all contracts” method.Composition of volumes: Whole Milk Powder dominates the offerings in Event 399, accounting for 59.7% of total volume. Price movements in this product 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 to trend firmer. SGX futures have also recorded gains in recent trading sessions, apart from WMP.Futures development: Since the last GDT event, average futures prices (C1–C6) have continued to trade above the average winning prices (AWPs) recorded at Event 398, except for AMF. AMF -3.83% SMP 11.00% Butter 1.49% WMP 2.40% In summary, Event 399 is characterized by a generally bullish outlook when considering developments in the futures markets.However, the continued increase in global milk production could limit the scope for further upside, although there has not yet been a clear bearish impact on pricing.In addition, the ongoing conflict in Iran may encourage buyers to secure additional volumes in anticipation of higher prices, potentially supporting short-term demand.