GDT Event 412 points to an optimistic outlook

Since the last Global Dairy Trade (GDT) event, market sentiment has been mixed across all three trading regions. Event 412 may provide further direction.Compared with the winning prices of the previous GDT auction, calculations based on SGX futures suggest a potentially strong increase if GDT results align with futures prices. This applies under both the “All Contracts” and “C2 Contracts” calculation methods.Key market insightsNew Zealand milk production: July milk production increased by 7.03%, equivalent to an additional 22 million kilo. Year-to-date production through July is up 5.43%, or 490 million kilo.SGX dairy futures: Market sentiment for New Zealand dairy futures has strengthened over the past few weeks. Overall, powder prices have moved higher, while sentiment for butterfat has been weaker.Volumes & products: Volumes are slightly higher compared with Event 411, increasing by 0.37%, or 149 tons, to a total of 40,600 tons.Exports: Year-to-date exports through July 2026 are up 10.31%, equivalent to 1.29 billion kilo LME.Expected price impact: If Event 412 results align with SGX futures, the GDT Price Index could increase by 3.70% under the “C2” method and by 3.00% under the “All Contracts” method.Composition of volumes: Whole Milk Powder (WMP) dominates the offerings in Event 412, accounting for 59% of the total volume. 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 prices have generally increased since the previous GDT event.Global outlook: Dairy futures across New Zealand, the US, and the EU have generally shown weaker sentiment.Futures development: Since the previous GDT event, average Butter and AMF futures for C1–C6 have traded below the average winning prices (AWPs) recorded in Event 411, while powder futures have moved higher. In summary, the outlook for GDT Event 412 is relatively optimistic based on developments in the futures markets. Stronger powder futures point to potential upside, although weaker butterfat sentiment provides some counterbalance.