Future dairy markets signal lower prices at GDT event 408

Since the previous Global Dairy Trade (GDT) event, market sentiment has turned bearish. Event 408 is expected to provide further direction, while international dairy futures markets have recorded weaker weekly performances.Compared with the winning prices from the previous GDT auction, calculations based on SGX Dairy Futures indicate a likely decline if GDT results align with the futures market under both the all contracts methodology and the C2 contracts methodology.Key market insightsNew Zealand milk production: May observed a 4.58% growth in production, equivalent to an additional 12 million kilo. Year to date through May, production is up 5.37%, or 468 million kilo.SGX dairy future: Market sentiment for New Zealand dairy futures has been mixed over recent weeks.Volumes and products: The reporting source published the same product volumes for Event 408 as for Event 407. This appears unlikely, and we have requested clarification. We will provide an update once we receive a response.Exports: Year-to-date exports through May 2026 are up 10.17%, equivalent to an additional 963 million kilo LME.Expected price impact: If the results of Event 408 match current SGX Dairy Futures, the GDT Price Index is expected to decline by 1.00% under the C2 methodology and by 5.00% under the all contracts methodology.Composition of volumes: Whole Milk Powder accounts for 59% of the total volume offered in Event 408, making it the dominant product. As a result, price movements in this category will have a significant influence on both overall market sentiment and the GDT Price Index. On the SGX futures market, Whole Milk Powder has generally traded lower since the previous GDT event.Global outlook: Across all international dairy futures exchanges, market sentiment has weakened.Futures development: Since the last GDT event, average Butter and AMF futures (C1–C6) have traded below the Auction Winning Prices (AWPs) recorded in Event 407, while milk powder futures have shown modest gains. AMF -6,42% SMP 2,37% Butter -2,85% WMP 1,63% Overall, Event 408 is characterised by a bearish outlook based on developments in the dairy futures markets. The recent increase in global milk production appears to have reduced the market firmness observed only a few weeks ago.