"Buyers' fears that [New Zealand] suppliers would not be able to meet demand have been dispelled somewhat," according to Kilsby. "NZX Dairy Futures market prices were gaining ground until Fonterra's surprise announcement that GDT volumes would be increased again. At that point futures prices eased back and further easing is likely to occur in the coming weeks due to the weaker GDT result."
Cheddar rallied 10.8 per cent to US$3,377 a tonne, while butter milk powder climbed 6.8 per cent to US$2,681 a tonne, and skim milk powder increased 5.9 per cent to US$2,935 a tonne.
See more details of the latest auction here:
Butter rose 2.5 per cent to US$3,912 a tonne.
Rennet casein slipped 0.7 per cent to US$8,694 a tonne, while whole milk powder fell 1.0 per cent to US$3,241 a tonne. Anhydrous milk fat declined 2.2 per cent to US$4,237 a tonne.
Lactose was not offered at the latest event.
Sweet whey powder was not offered, not sold, or sold at its starting price in either the current event and/or in the prior two events.
Despite Fonterra adding an extra 8,300 tonnes to its GDT forecast volumes for the March to July period, the amount of whole milk powder on offer on GDT is still 40 per cent below year ago levels, Kilsby said.
The AgriHQ Snapshot Farmgate Milk Price indicates that if the GDT prices from the March 3 auction were achieved across the entire season this would equate to a milk price of $6.15/kgMS, which is unchanged from the previous auction. The weaker whole milk powder price was offset by a stronger butter price and a reduction in the lactose price, which is a cost to Fonterra.
The New Zealand dollar last traded at 75.67 US cents at about 12:23pm in New York, compared with 75.10 US cents at 5pm in Wellington on Tuesday.
There were 107 winning bidders out of 160 participating bidders at the 14-round auction. The number of qualified bidders rose to 703, up from 694 at the last auction.
