CSB - Stu Davison - GDT

The latest GDT auction was overnight - Our man Stu gives us the insights.  

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Episode Transcript

Speaker 1 (00:00):
From the sports field to the shearing shed.

Speaker 2 (00:02):
It's the Country Sport Breakfast with Brian Kelly on gold Sport.

Speaker 1 (00:07):
Eight past seven, joining us out of Chicago. I think
from Darry Insight, Stu Davidson, morning.

Speaker 2 (00:12):
Stew, good morning. How are we very well?

Speaker 1 (00:15):
Thank you? So I don't think the dairy fraternity we'll
be dancing in the street too much. With a wee
drop overnight in the global dairy trade and digs.

Speaker 2 (00:24):
Yeah, down point five percent on the GDT index this morning,
led by a decline in HUMLK powder down two point
five percent. But let's be clear, it's only a small
volume sold sixteen hundred total. But yeah, not exactly the ideal,
but there's a few good numbers under the hood.

Speaker 1 (00:40):
A yeah, on the back of what we had five auctions,
all pluses, I mean, I guess was it to be
expected a drop of around point five.

Speaker 2 (00:50):
Yeah, we were pricing in a decline of this auction.
So the futures market and sort of chatter market wide
was for a correction, you know. Put that in context.
Hummic powder prices broke through three four hundred at the
last auction, which is a little bit higher than the
market likes. At the moment, and so we expected prices
to come off a little bit. But then again on
the other side of that, you know, milk fat prices
continue to search higher. Butter up six point two percent.

(01:13):
We broke records on the nearest three contract prices and
so butter and contract period one, which is the nearest
contract up to eight thousand dollars a ton. So to
put that in perspective, that's a record high and that's
just phenomenal, it's incredible. So there is some good numbers
in there, and milk fats continue to be quite strong.

Speaker 1 (01:31):
Let's just have a look at some of the other
numbers from overnight as well. I mean, as you said,
butter six point two plus, that was really good. I
think that I know there was one other plus skim
milk powder, wasn't there?

Speaker 2 (01:41):
Yeah, skim up point seven and under that one too
a good number as well. So European price has actually declined,
which counted for a lot of that decline, but Fontira
price is actually lifted. And the real key one there
is the Ford curve, So AMOS sales and months ahead.
The tail end of that sales curve is pretty strong too,
some pretty significantly strong prices as much as two nine
hundred per ton of skimm of powder, so incredible prices

(02:03):
considering the market's been pretty locked at about two six
hundred for the last year basically, so some real impressive
pricing on that front too.

Speaker 1 (02:11):
Where were the bidders coming from this time around.

Speaker 2 (02:15):
Yeah, good question. So usually we don't see a lot
of China at this time of the year. It's usually
a seasonal lull, but they were worse than normal at
this point, and so Southeast Asia slash Oceani picked up
over half of the total volume sold and they were
the biggest buyer in most of these products as well,
so really significant demand or demand from that region. But
let's be clear that, you know, the lack of competition

(02:36):
from China usually opens the door to the other regions there,
and those regions were left holding the bag for need
of a better term, and walked away with a larger
volume than they probably wanted.

Speaker 1 (02:47):
To be honest, we're still waiting for China to come
into it, aren't.

Speaker 2 (02:49):
We Yeah, exactly right, and the China story still gets
a little bit murkier. So there's a bit of chatter
at the moment that they're looking to sort of push
volumes they have already put urchase somewhere else on the market,
which is a bit of a concern. But then there's
also a bit of a positive going on the news too,
with Europe has been probing China about ev vehicles into
Europe and looking to do a bit of an anti

(03:11):
dumping tariff retaliation, and China's turned around this week and
said they're going to do the same for pork imports
into China, with a bit of a chatter that they
might extend that to dairy imports from Europe as well.
So if that dairy probe or tariff gets put on
top of European imports dairy imports into China, then it's
going to really shake the market up in the months ahead.

Speaker 1 (03:33):
Yeah, that's going to be interesting. So the next one
in a fortnite could be an interesting one.

Speaker 2 (03:37):
Yeah, exactly. We don't know when the fireworks is going
to go off or if, but yeah, there's always something
happening in the dairy market.

Speaker 1 (03:44):
Absolutely never a dire moment. Hey, Stuve, thanks for joining
us this morning.

Speaker 2 (03:47):
Mate, No problem, Thanks having me, dude.

Speaker 1 (03:49):
Davidson