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The post-auction sharing in this issue is provided by Mr. Huang Yi, the butter champion of the "First Bulk Dairy Trader Grand Prix".
357GDT 20240604
The 357th round of GDT tenders came to an end on Tuesday evening.
On the eve of the "Reshaping the Growth Logic" theme forum hosted by Dairy Online, this round of GDT's mainstream products once again ended with a rise across the board.
Taking advantage of the topic, the theme of this sharing is temporarily named "Reshaping (Analyzing) the Logic of Rise".
Combined with the results of this round of bidding, I would like to briefly share the experience and views of several main varieties:
1
Whole milk powder
In this round of bidding, the weighted average price of whole milk powder closed at $3,478, up 1.7%, and the main contract CP2 closed at $3,415, up about 1.5% from the previous round. From the perspective of procurement ratio, China's North Asia region and Southeast Asia are neck and neck, driving this round of rise, followed by buyers from the Middle East and Central and South America.
Analyzing the logic of the rise of whole milk powder this time, the main reasons can be attributed to the following points:
1) The continuation of the impact of the last round of bidding on the spot market;
After the last round of bidding, the whole milk powder spot market began to be active, due to the high concentration of spot in the domestic market, and the general shortage of inventory, merchants are reluctant to sell, leading to a slight increase in transaction prices, but due to relatively moderate market demand, and last Tuesday night's GDT Pulse results were relatively stable, there was no significant price increase.
2) Extreme shrinkage, futures derivatives market prices higher;
Compared with the relative stability of the above-mentioned spot market, the price of the futures market is gradually rising. Those who are interested can find that the amount of whole milk powder in this round of bidding is the lowest amount of this year, especially the main contract CP2 is only 1,890 tons, and in my memory, since GDT's history, the main contract 2 of whole milk powder has never been less than 2,000 tons. The extreme shrinkage of the supply side, especially the shrinkage of the contract segment that is most closely linked to international futures, can easily trigger a black swan event.
3) Domestic milk powder and imported milk powder go their own way and do not interfere with each other;
As mentioned in the previous sharing, the current imported whole milk powder and domestic milk powder have each walked out of a non-crossing route.
Although the milk volume has decreased due to the recent rise in temperature, the amount of powder sprayed has been greatly reduced, and the milk price has rebounded, but there is still huge digestive pressure on the excess domestic milk powder inventory in the early stage; At the end of the New Zealand season, the domestic spot supply of imported milk powder is now tight, coupled with the extreme shrinkage of the New Zealand supplier in June, which further drove the price of imported milk powder to rise, increasing the price scissors gap between imported milk powder and domestic milk powder.
This situation is similar to last year, but it is different.
Perhaps last year's replacement of domestic milk powder enterprises have basically completed the replacement, the increase in the consumption of domestic milk powder has decreased, and the demand stock of imported milk powder is still there, or perhaps this year's foreign demand is more vigorous year-on-year, the increase in demand and the imbalance between supply and demand caused by the extreme shrinkage of New Zealand's production season, the superposition of many factors, has promoted this year's imported whole milk powder is still rising.
After analyzing the rising logic, let's look to the future.
As the volume of the second round of bidding in June is still very small, on the one hand, driven by a variety of demand factors, the price of imported whole milk powder in June is expected to remain high, and it is not even ruled out that it will hit a new high this year. On the other hand, the continuous increase in the volume after July will make buyers more rational and cautious in the next few rounds of bidding.
Against this complex backdrop, the future price direction is also uncertain. It is recommended that everyone operate rationally according to their own situation. After experiencing the results of the extreme reduction in June, we also look forward to the possible effects of the "extreme volume" after the new production season in New Zealand.
2
Skim milk powder
In this round of bidding, the weighted average price of skim milk powder closed at $2,722, up 3.0%, and the main contract CP2 for New Zealand skim milk powder closed at $2,750, up about 6.0% month-on-month. Compared with the last two rounds of bidding, North Asia once again returned to the top position of New Zealand's skim milk powder, followed by Southeast Asia, and the action of continuous buying remained unchanged.
The rise of skimmed milk powder this time seems to be a matter of course, but it is a bit unexpected:
The international futures market has come out of a wave of upward movement, which has driven the rise of GDT bids as a matter of course;
The amount of skim milk powder in this round of bidding is also at the level of ground volume, especially the main contract CP2, which is the lowest in this year. In recent months, the international futures market has continued to increase foreign demand and the number of bids has been decreasing, and after the last round of bidding has risen, the international futures market for skimmed milk powder has come out of a wave of upward trend.
The tepid domestic market makes this round of gains a bit unexpected;
Although the last round of bidding for skim milk powder has risen to a certain extent, due to the backlog of skim milk powder inventory of domestic businesses, the spot market demand is still tepid. Although the trading volume has slightly enlarged compared with the previous period, it is still difficult for the price to improve, and it is still difficult to release demand. Against the backdrop of weak demand, it is also unexpected that the proportion of China's current round of purchases has increased significantly; There is a high probability that it is caused by large households entering the factory for procurement.
In my previous sharing, I have mentioned many times that the domestic skim milk powder market at this stage is more important than the price, and the demand is more important. As for the future trend of skim milk powder, we must first pay attention to whether this round of rise can drive the domestic skim milk powder out of a wave of destocking market.
Taking advantage of the significant reduction in GDT volume by the New Zealand supply side at the end of the season, the key to the stability of skim milk powder prices in the future is to digest domestic inventories, and the changes in market demand for skim milk powder in several important application areas are also the key to determining the market price of skim milk powder.
3
butter
In this round of bidding, the weighted average price of butter closed at $6,864, up 1.7% from the previous round (the last round was 6,931, is it a bug in GDT's background statistics?). The main contract CP2 closed at $7,495, up about 7.8% from the previous round, and exceeded $7,000 again after many years. China's North Asia region continues to be the top player, followed by Southeast Asia and the Middle East.
Driven by the strong momentum of milk fat prices in the United States, the trend of "two barrels of oil" is still the biggest highlight of this round of bidding, and it has once again set a new record. Butter, which has been on the top of the hot search many times, seems to be inevitable to continue to rise.
However, it is worth noting that the price of the near-month contract CP1 and CP2 has opened a price gap of nearly $1,500 with the price of the long-month contract CP5 and CP6.
Since mid-May, the situation of "hard to find a box" in the domestic imported butter spot market has lasted for more than half a month, and the spot price has naturally risen. Judging from the results of this round of bidding, the further increase in the contract price of butter delivered in recent months reflects the strong rigid demand of various merchants for butter in recent months.
On the one hand, the results of this round of bidding will push the prices of spot butter and butter delivered in the market to further rise; On the one hand, it will lead to the price of butter in the far month, which will diverge with the huge price difference with the bid price of the near month. The spot is still "hard to find", and the long-term temporary "not a ton".
Due to the shortage of imported butter and the record high price, many domestic users have been forced to consider the alternative of switching to domestic butter; The sharp reduction of long-term prices in this round of bidding has brought a glimmer of hope for merchants and users who love to import butter to reduce costs and increase efficiency.
At this stage, the merchants who have spot can sincerely sigh: "Oil" you are so good! Merchants who do not have a position, it is recommended that you do not blindly chase high according to your own situation, and purchase rationally, and the one that suits you is the best.
4
Anhydrous cream
In this round of bidding, anhydrous cream reached a new historical high, with a weighted average price of $7,417, up 0.9%; The main contract CP2 closed at $7,790, up about 0.7% from the previous round. Buyers from the Middle East have sprung up, taking away the long-held No. 1 position from Southeast Asian buyers, with Southeast Asia coming in second, while China is at the bottom of the list after Central and South America and Africa.
Although the price of anhydrous cream once again refreshed the record high of the US dollar price in this round of bidding, as in the case of butter, the prices of the near-month contract and the long-term contract of waterless cream also diverged.
In the spot market, the anhydrous cream that has stood on the "altar" for a long time has been "hard to find" and almost out of stock. However, although the supply has not been alleviated recently, the record high spot prices have also caused the market demand to stagnate slightly, and the transaction has slowed down, and there has been an embarrassing situation of price but no market. With this round of bidding, the price of anhydrous cream has returned slightly, which seems to indirectly reflect the high price risk of anhydrous cream has gradually emerged and released.
Since July, the number of anhydrous cream bids will be directly doubled compared with June, which will be a huge test of the market price capacity of anhydrous cream, will this be the inflection point of the price of anhydrous cream? I believe that it is also the common concern of the majority of businesses.
Under the market of the rise of mainstream bulk dairy across the board, what is the future price trend and when is suitable for entering the market for procurement, it has become the focus of everyone's attention and discussion, and I hope to discuss with you through this dairy online forum.
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