The latest NZX futures market pricing continues to point to a strong lift in whole milk powder prices at tomorrow morning's GlobalDairyTrade (GDT) auction.
Whole milkpowder has the biggest bearing on Fonterra's farmgate milk price and is the bulk of what is sold on the auction platform.
"We are seeing large premiums built into the futures over the last GDT equivalents," derivatives specialist OM Financial said.
"Given the futures generally holds a premium over GDT - our expectation is for WMP to be up 10 per cent tonight," it said in a commentary.
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The new milk futures contract - which is aimed at farmers wanting to lock in a farm gate milk price - last traded at NZ$4.75 kg of milk solids, reflecting recent strength in dairy prices.
Analysts said improved prices over the next two auctions would be an encouraging sign for the entire season.
Prices so far this season, which started on June 1, have been largely flat before exploding into life at the last auction on August 2.
Fonterra's farmgate milk price of $4.25 a kg of milksolids for 2016-17 is still short of DairyNZ's breakeven estimate of $5.05/kg.