Archive: GDT - Does the latest reduction hide positive signals?

Published 3 December 14

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The latest 1.1% drop at the GDT auction on 2 December was largely influenced by the 7.1% reduction in WMP, while all other commodities showed strong increases compared to the previous auction. Cheddar and butter are showing positive signs, with average weighted prices increasing from the beginning of November. The declining trend in SMP prices appears to be slowing, potentially suggesting signs of stabilisation.

However, this is just an indication and it is too early to know whether these price signals are a sign of sustained change. Any significant switch in price direction will largely depend on whether a noticeable shift in the supply and demand situation occurs.

Fonterra auction 2 Dec14 graph