Bearish sentiment ahead of GDT event 406

Since the previous Global Dairy Trade (GDT) event, market sentiment has turned increasingly bearish. Event 406 may provide further direction for the market, particularly as international dairy futures markets have recorded weaker performance over the past week.Key market insightsNew Zealand milk production: April milk production increased by 6.04%, equivalent to an additional 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 over recent weeks, with most contracts trading below previous auction levels.Volumes and products: With the 2026/27 season having recently commenced, offered volumes declined slightly at this event, primarily due to the absence of 545 tons of BMP. Total auction volume stands at 11,001 tons, down 4.76% from the previous event.Exports: Year-to-date exports through April 2026 increased by 7.89%, equivalent to 613 million kilo of milk equivalent.Expected price impact: If Event 406 results align with SGX Futures pricing, the GDT Price Index could decline by 5.8% under the C2 methodology and by 5.0% under the All Contracts methodology.Composition of volumes: Whole Milk Powder (WMP) continues to dominate offerings in Event 406, accounting for 57% of total auction volume. Consequently, price movements in WMP will significantly affect both overall market sentiment and the GDT Price Index. Since the previous GDT event, WMP futures on the SGX have generally moved lower.Global outlook: Dairy futures across major international exchanges have shown weaker sentiment, reflecting broader concerns regarding supply growth and market demand.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 405. AMF -7.58% SMP -6.66% Butter -4.07% WMP -4.55% Overall, Event 406 is characterised by a bearish outlook based on developments in the futures markets. The recent acceleration in global milk production appears to have weakened the market firmness observed several weeks ago, increasing downward pressure on dairy commodity prices.