Dairy markets weaken ahead of GDT event 402

Since the previous Global Dairy Trade (GDT) event, market sentiment has been predominantly bearish, except for milk powders. Event 402 may provide further direction, particularly as international futures markets recorded weak weekly performance across all regions.Compared with the winning prices from the previous GDT auction, calculations based on SGX futures indicate a likely decline if GDT results align with futures pricing under both the “all contracts” and “C2 contracts” methods.Key market insightsNew Zealand milk production: March production increased by 9.76% (+172 million kilo), compared with a 6.01% rise in February. Year-to-date (March) production stands at 6,344,000,000 kilo, representing a 5.50% increase.SGX dairy futures: Market sentiment for New Zealand dairy futures has weakened in recent weeks.Volumes and products: As the season approaches its end, offered volumes declined at this event, primarily due to the absence of BMP (-570 tons). Total auction volume stands at 12,592 tons.Exports: Year-to-date exports (through February 2026) are down 2.28%, equivalent to a decline of 95 million kilo LME.Expected price impact: If Event 402 results align with SGX futures, the GDT price index could decline by approximately 1% under both the “C2” and “all contracts” methods.Composition of volumes: Whole Milk Powder (WMP) dominates the offering in Event 402, accounting for 56% of total volume. Price movements in WMP will therefore have a significant impact on overall market sentiment and the index. Notably, WMP futures on SGX have mostly declined since the previous GDT event.Global outlook: Dairy futures on both the EEX and CME reflect weaker market sentiment.Futures development: Since the last GDT event, average futures (C1–C6) have continued to trade above the average winning prices (AWPs) of Event 401, except for AMF and butter. AMF -8.80% SMP 0.19% Butter -11.38% WMP 2.15% Event 402 is characterized by a broadly bearish outlook, as reflected in futures market performance. The strong increase in global milk production appears to have weakened the firmer market tone observed in recent weeks. At the same time, geopolitical uncertainty, including tensions involving Iran, may encourage some buyers to secure additional volumes in anticipation of potential price increases.