Bearish outlook ahead of GDT event 407

Since the previous Global Dairy Trade (GDT) event, market sentiment has turned bearish. Event 407 is expected to provide further direction for the global dairy market, following weaker performance across international dairy futures exchanges over the past week.Compared with the winning prices from the previous GDT auction, calculations based on SGX futures indicate a likely and significant decline if GDT results align with 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%, or 88 million kilo. Year-to-date production through May is up 5.39%, equivalent to 456 million kilo.SGX dairy futures: Market sentiment for New Zealand dairy futures has weakened over recent weeks.Volumes and products: With the 2026/27 season having just begun, offered volumes increased sharply, supported by higher milk production. Total auction volume for Event 407 stands at 24,632 tons, up 124% from the previous event.Exports: Year-to-date exports through May 2026 increased by 10.17%, or 963 million kilo LME.Expected price impact: If Event 407 results align with SGX futures, the GDT Price Index could decline by 4.90% under the C2 method and by 4.15% under the all contracts method.Composition of volumes: Whole Milk Powder accounts for 59% of the total volume offered in Event 407, making it the dominant product. Consequently, price movements in WMP will have a significant influence on both overall market sentiment and the GDT Price Index. On the SGX futures market, WMP contracts have mostly declined since the previous GDT event.Global outlook: Dairy futures across all major international exchanges have continued to reflect weaker market sentiment.Futures development: Since the previous GDT event, average futures prices (C1–C6) have continued to trade below the average winning prices (AWPs) recorded in Event 406. AMF -11.82% SMP -4.77% Butter -6.53% WMP -2.55% In summary, Event 407 is characterized by a bearish outlook based on current futures market performance. The strong increase in global milk production appears to have weakened the market firmness observed only a few weeks ago.