This week’s event continued the stiff correction being driven by a weaker demand side, which remains the dominant influence at present in all major dairy markets. The GDT index fell 4.6% with losses heaviest for SMP and a similar loss for WMP to the previous event.

SMP fell heavily, losing US$247/t or 7.1% on average to US$3,250/t on poor demand. Fonterra MH C2 fell US$230/t to US$3,240/t, with a flat forward curve. WMP dropped 4.25% or US$152/t on average to US$3,421/t. Fonterra Regular C2 lost 4.6% or US$160/t to US$3,355/t, with a steadily firmer forward line for later deliveries (which incidentally had larger losses) to US$3,480/t for C5 delivery.

Fats were again weaker, with similar falls for the two commodities, butter faring slightly better after the shock of the previous event. Butter dropped 2.7% or US$132/t on average to US$4,851/t, with consistent losses across contracts to leave a flat forward curve. C2 lost US$120/t to US$4,840/t. AMF fell 2.6% on average to US$5,661/t. C2 was the worst contract and lost 3.4% or US$197/t to US$5,637/t. Losses were lighter later to leave a flat forward curve. Cheddar had a similar outcome to the previous event, losing 4.0% or US$197/t on average to US$4,769/t. NZ young cheddar C2 fell US$250/t to US$4,675/t.