Host Cody Koster and Jon Spainhour take a deep dive into this week’s GDT report.
Questions or comments? Contact Jon at jcs@Ever.Ag, Cody at cjk@ever.ag, or give us a call at (312) 492-4200.
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00;00;00;13 – 00;00;16;22
Futures trading involves risk and is not suitable for all investors. Content provided in the segment is not for educational purposes and is not a solicitation to buy or sell commodities. Opinions and statements of guests not affiliated with every egg of their own, and do not reflect the views of the brand. The accuracy of their statements can not be guaranteed by a Barack.
00;00;16;25 – 00;00;27;02
Hello everybody. Welcome back to another GDC Tuesday. I’m your host, Cody Koster, with me from Chicago, Mr. John Spainhour How are John, how are you on this beautiful Tuesday, July 1st?
00;00;27;02 – 00;00;33;22
Well, Cody, it finally, finally feels like summer around here. So I am very excited to be here.
00;00;33;23 – 00;00;53;05
Yeah, it feels like we went from winter to summer in about two weeks time and here we are with the humidity in the Midwest. Welcome to it. Yes, sir. Well, the weather outside was hot, but GTI not so much today. Down 2.6% from last global dairy trade that we had on June 17th.
00;00;53;06 – 00;01;27;17
You’re right Cody, it looks like almost everything was down in varying degrees here on this recent GTI. Let’s start out maybe with the fat products here. We’ll look at butter butter on an 82% equivalent coming in around $3.41. That is lower by 4.7%. What I would say again, still at a pretty healthy, healthy premium to the US butter market at 260, if we go up to the AMF, it was down about the same percentage to about 4.8%, coming in around 314 a pound.
00;01;27;17 – 00;01;53;15
Again still at a very healthy premium to the US as we moved to the cheddar side. If you remember last auction, we saw the cheddar price go up about 10%. This time we came down about 2.6%. We are pricing New Zealand Cheddar at this time at about $2.20. Again, that is lower, but again significantly higher than the US cheddar price of one 72.25.
00;01;53;16 – 00;02;26;08
Mozzarella was down, but only down -0.2% to about $2.17. I do want to remind everybody that the mozzarella price on the GTI tends to really be a European price. So European markets, at least on the GTI, trading around 217. So I’d say those two prices are relatively in line with what we’ve seen coming out of Oregon. And some of the other international pricing points that we see out there as we go into the powders.
00;02;26;08 – 00;02;55;04
I think this is where it gets pretty interesting. Let’s go to Homa powder. Homa powder was down 5.5%. Just looking at it here. This is the lowest homa powder has been since January when we really began the ascent higher. So that is interesting to see that come down. And if we compare whole milk powders results to where the GTI futures or the futures, these actually came in a little bit better than where the futures were looking.
00;02;55;04 – 00;03;21;29
That’s been relatively consistent to see that where the futures were a little bit discount to where the spot actually came in. And then finally, as we move to skimmed milk powder, skim milk powder came in at -2.1% at $1.23, I would say that came in consistent with where we saw the GTI pulse, a little bit lower than maybe where some of the futures were pricing.
00;03;21;29 – 00;03;32;28
But there’s, you know, that’s just the premium model on the curve that we’re going to see coming into these lower prices. So all in all, a lower priced auction across the.
00;03;32;28 – 00;03;57;10
Board, lower priced auction. But I know you’ve been for the past at least 2 or 3 global dairy trades. When we’ve talked, Ben mentioned about the summer months are when the volumes really start picking up for global dairy trade on these every other Tuesdays. And today, specifically, the event over event change on volume was up 69% year over year change up 6% 110 winning bidders today.
00;03;57;10 – 00;04;01;29
So people even with falling prices are definitely here. More and more of this product.
00;04;02;05 – 00;04;20;12
That is correct Cody. You are correct there. We’ve been saying it for a while. This is the time of year when volumes start to increase right? There’s a time of the year when volumes start to decrease. And you know, we’ve been slowly but surely bringing those volumes up. That’s just a very seasonal element to the New Zealand milk production season.
00;04;20;12 – 00;04;50;12
You know, you make the case, hey, more volume leads to lower prices. And indeed it did. But when I just look at some of the headlines here, this auction compared to the last auction, had 69% more volume than the last auction. Again, not unexpected. And I think people were prepared for it, but I guess I just want to look at it to say the market had come in, have been moving lower in anticipation of these, and it absorb 69% more volume than we’ve seen.
00;04;50;12 – 00;05;02;06
I think all in all, the market handled this relatively well. Again, lower is lower. You don’t want to take away from that. And we know New Zealand’s going to have a little bit more milk. But in the end I think was absorbed quite a bit of product here. Yeah.
00;05;02;06 – 00;05;17;10
It definitely felt like you know from what you’re posting when the event started to win it kind of wrapped up. You can tell that there was a lot more participants on this one than there was the last global dairy trade. I guess one of the regions that sticks out to me, you know, North America of 593% with one winning bidder.
00;05;17;10 – 00;05;30;10
I just kind of found that funny in the statistics that we put out. But North Asia event change up 132% and then year over year almost 60% higher with 43 winning bids on this auction farm a very interesting.
00;05;30;11 – 00;05;48;13
It’s pretty amazing when you look at it. I mean, again, we’ll go back to big volumes, right? So let’s start there. And everyone knew those volumes were coming. That’s not a surprise. That happens every year. I think we really have to get granular here is to say North Asia. If we compare their year over year volume, it was up 59%, right?
00;05;48;13 – 00;06;09;11
If we look at their event over event volume up 113. Stunning for sure to see that number coming out of China. But on its own I think it’s okay. But in the context of all this big volume that everyone knew was coming. And then look at this knowing it’s coming on a year over year basis, up 59% when we go to Southeast Asia, a little bit of a different story.
00;06;09;11 – 00;06;33;03
And that might have been where some of the weakness came from here on a year over year basis, down 36%. But on an event over event basis up 94. So definitely our big star players were here to buy on this auction. When we go to the Middle East year over year, change up 127% and up 42% on an event change.
00;06;33;11 – 00;07;02;24
So again, if we were to say who are the star players, I’d go North Asia, which is China, Southeast Asia coming in second and Middle East coming in third. And boy oh boy, look at the performance they put on again. It’s really easy to say, hey, this is an auction. That was lower. It was right. But if you look at it through the context of big volumes coming on, who was here to buy and who bought, and compare that to a year over year basis.
00;07;02;24 – 00;07;08;29
Foil boy, that’s a it’s a much better result than what we might have seen just a few years ago under those same conditions.
00;07;09;06 – 00;07;20;01
Markets are definitely getting bigger and broader. And this definitely shows that more people, more participants are coming in to get the product that they so desperately need. Yes, sir. Well, John, is there anything else on this GDP that stands out to you?
00;07;20;02 – 00;07;42;09
I guess I would look at it, Kody, through the lens of the S&P market, we have seen huge discrepancies in price over the course of the last six, eight, nine months. And nonfat versus S&P. If you remember here in the US our nonfat price went to a super premium up to that dollar 40 level. While the rest of the world was around $1.20 ish.
00;07;42;09 – 00;08;01;22
And a lot of that was due to bird flu. We lost exports. We built some inventory, prices came down, we caught exports right down in that 115 area. The rest of the world started moving higher. That helped us get more exports. And then finally we kind of overshot the mark a little bit and tried to approach that 130 area.
00;08;01;22 – 00;08;32;11
Europe and New Zealand started edging lower on this auction today. You can say that New Zealand and Europe are at almost exactly the same price they are at. We’ll call it $1.23, and this is the lowest price we’ve been at since going back since January on S&P, just a little bit lower than we were in March. So with that in mind, I would say that the New Zealand and European price are right around $1.23.
00;08;32;12 – 00;08;53;05
We’re at a dollar 25.5 here on the CME. I do not in any way, shape or form want to say that we can’t export when we’re two and a half cent premium to the rest of the world, but I will say that it does start to make our life a little bit more difficult. And as life looks a little bit more difficult on that, we might lose some export sales.
00;08;53;07 – 00;09;16;17
Well, John, thank you for that. Inside, look at the global dairy trade that we had this morning, the very first day of July 2025. The next time John and I are going to be back with everyone is actually going to be the 15th of July. So two weeks from now, smack dab in the middle of the month. And at that point we will see what transpires across the pond and across the world for our products.
00;09;16;17 – 00;09;24;19
But until then, everyone have a fantastic rest of the week and even better weekend is going to be hot. Stay hydrated. We’ll see you guys next time.
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