The latest GDT result is "really positive" for Kiwi farmers says Rabobank Dairy Analyst Emma Higgins.
Prices went beyond market expectations, with the Global Dairy Trade price index rising by 3.7 per cent since the last auction.
"The fact that we've seen such strong prices, particularly for skim milk powder and Whole Milk Powder, the offers are at their peak, or nearing their peak, it's certainly very good for farmers and the farmgate milk price" Higgins told The Country's Andy Thompson.
Whole milk powder (WMP) prices, which have the greatest bearing on Fonterra's farmgate milk price, rose by 3.6 per cent to US$3254 a tonne.
Skim milk powder prices, which also have a strong influence on the milk price, rose by 6.7 per cent to US$2924 a tonne.
New Zealand products were trading at a premium against other offshore sources which was "really good considering that volumes are going to drop off after this month" said Higgins.
Unsettled spring weather in parts of the country was impacting pasture growth and production and the overseas market was beginning to grasp that said Higgins.
"I think they were expecting more bullish production numbers from our New Zealand spring peak. They were quite surprised when I was telling them about some of the challenges that certain farmers were having around parts of the country".
While official data was still pending, peak volumes would most likely be lower for October.
This meant there could possibly be upwards pressure on markets still to come, especially since some buyers had been relaxed about procuring product, in particular skim milk powder said Higgins.
Rabobank was still sticking to its $7.15/kgMS farmgate milk price forecast for the 2019/20 season which the bank had held since April this year.
Higgins said the bank would review this figure early next month in its next Global Dairy Quarterly report.