Market sentiment weakens ahead of GDT Event 405

Since the previous Global Dairy Trade (GDT) event, market sentiment has been mixed. Event 405 may provide further direction to the market, although international dairy futures markets have generally recorded bearish to mixed results over the past week.Compared with the winning prices from the previous GDT auction, calculations based on SGX Dairy Futures indicate a likely and significant decline if GDT results align with current futures prices under both the All Contracts method and the C2 Contracts method.Key market insightsNew Zealand milk production: April milk production increased by 6.04%, equivalent to 88 million kilo. Year-to-date production through April is up 5.61%, or 419 million kilo.SGX dairy futures: Market sentiment for New Zealand dairy futures has weakened in recent weeks.Volumes and products: Despite the season approaching its end, the volumes offered increased slightly at this event, mainly due to the inclusion of 545 tons of BMP. Total auction volume for Event 405 stands at 11,551 tons.Exports: Year-to-date exports through April 2026 increased by 7.89%, equivalent to 613 million kilo LME.Expected price impact: If Event 405 results align with SGX Futures prices, the GDT Price Index could decline by 4.0% under the C2 method and by 3.4% under the All Contracts method.Composition of volumes: Whole Milk Powder (WMP) remains the dominant product category in Event 405, accounting for 54.3% of total offered volumes. Price movements in WMP will therefore have a significant impact on overall market sentiment and the GDT Price Index. On the SGX futures market, WMP contracts have generally declined since the previous GDT event.Global outlook: Dairy futures traded on both the EEX and CME have shown weaker sentiment in recent weeks.Futures development: Since the previous GDT event, average futures prices across contracts C1–C6 have continued to trade below the average winning prices (AWPs) recorded at Event 404, except for AMF and butter. AMF -3.64% SMP -4.89% Butter -3.45% WMP -3.46% Overall, Event 405 is characterized by a bearish outlook based on developments in the futures markets. The strong increase in global milk production appears to have reduced the market firmness observed several weeks ago, contributing to weaker sentiment across most dairy commodity markets.