NZ: Headline dairy prices index was unchanged - ANZ

Research Team at ANZ, notes that the NZ dairy prices continued to range trade overnight as the headline index was unchanged and whole milk powder prices registered a 1.9% increase.

Key Quotes

“Prices for product to be delivered in the near term were generally under pressure, but there was more positivity for later delivery periods. The WMP curve regained a small upward slope, which was positive given how flat it had been recently and the higher seasonal volumes currently being sold.

Fonterra will provide an update to its opening milk price forecast in August. The last two major updates have seen spot market pricing used. If this approach continues, it would imply a downgrade, with international prices having moved lower since May and the currency higher – a bad combination. While this will continue to weigh on sentiment, any downgrade is unlikely to affect 2016/17 cash flow projections materially though.”