Dairy product prices have risen overnight in the latest GlobalDairyTrade auction, rebounding from three consecutive declines, amid an improvement in market sentiment.

The GDT average winning prices advanced 3.6 percent to US$2,419, from US$2,345 at the previous auction two weeks ago, and gaining for the first time since the October 6 auction. Some 28,158 tonnes of product was sold, down from 30,044 tonnes two weeks ago.

The AgriHQ 2015-16 Farmgate Milk Price gained 21 cents to $4.48 per kilogram milksolids. This is comparable with Fonterra's current 2015-16 milk price forecast of $4.60/kgMS.

Whole milk powder prices made considerable gains on the NZX Dairy Futures market over the past fortnight, with the nearby contract lifting 8 percent.

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That sentiment flowed into GDT prices, according to AgriHQ dairy analyst Susan Kilsby. To be sure, excess supply will keep a lid on prices.

"Whilst we have seen a solid lift in prices at this auction, market fundamentals still remain weak due to the sheer volume of milk that is being produced across the globe," Kilsby said in a note. "Therefore any recovery in prices is likely to occur slowly."

Butter climbed 5.7 percent to US$3,009 a tonne, while whole milk powder increased 5.3 percent to US$2,260 a tonne. Skim milk powder rose 3.2 percent to US$1,918 a tonne, and anhydrous milk fat added 2.3 percent to US$3,519 a tonne.
Lactose was 1.7 percent higher at US$507 a tonne.

See more from the latest auction here.

Cheddar fell 1.5 percent to US$2,829 a tonne, rennet casein declined 4.3 percent to US$5,046 a tonne, while butter milk powder dropped 5.6 percent to US$1,729 a tonne.

The New Zealand dollar last traded at 66.75 US cents at about 11.22am in New York, compared with 65.84 US cents at 5pm in Wellington the previous day.

There were 121 winning bidders out of 161 participating bidders at the 15-round auction. The number of qualified bidders rose to 613, up from 609 at the last auction.