Blogs

GDT 188: Weak but good

The last auction result (+3.6%) was right at the top end of my expectations (+/-3%) and WMP was +5.2% but there has been limited follow through since in the futures market.

The result reinforced expectations for a final price for the current season slightly above $6.00 (the 2016/17 futures have strengthened from $6.05/kgMS to $6.11/kgMS) but since the last auction the 2017/18 futures price has weakened from $6.25/kgMS to trade at a discount to the current season at $6.00/kgMS.

2016/17 nearly over

The 2016/17 season is coming to a close and although there have been a  few surprises (March production data), the emphasis is now really on 2017/18.  It is worth noting that the year has been better than expected from a revenue and profitability perspective, notwithstanding the climatic challenges that farmers have been through. At the start of the season a $6+ milk price and a 40 cent dividend was something we would have all accepted without too much thought!

WMP under performing; GDT 186

Commodity prices:

Some could be bored with some of my commodity commentary and the repeated references to supply-demand balance. The chart below, I think, is an interesting example of these factors.

Auction 185 - steady?

The last auction preview (auction 184) was titled “attempting to find a base”.  Notwithstanding that somewhat optimistic title, futures and price action ahead of the auction was suggesting further significant falls in both WMP (circa 4-6%) and SMP (circa 10%+).

Auction 184 - finding a base?

SUMMARY:

Another testing auction (183) ...

Dairy commodity markets

The last 6 weeks has proved more challenging than expected for both dairy commodity market and market forecasters.

GDT 182 - hold your breath!

The following blog is from JT Macfarlane who I introduced two weeks ago.  JT is keenly interested (and qualified) in commodity markets and is providing the below as a commentary on GDT; his motivation I think is mainly as a dairy farmer himself but is also as a Director of MyFarm....

Dairy commodity markets down

The following is a blog created from a regular newsletter provided by JT Macfarlane, a director of MyFarm.  JT is a dairy farm owner in his own right but he has a distinguished career as an investment banker and a particular knowledge of and interest in commodity markets.  He presented at the Grow your mind series of Seminars along with Brian Rice last year talking about how to manage with volatile commodity markets.

Where are the opportunities?

Most people have ambition for themselves, their career and ultimately for their family. People that make a difference generally want to engage in fulfilling work or endeavour within an industry that they love. Ambition means that they either want more important roles, increasing responsibility and the increasing [salary] rewards which go with this, or that they want to access a high growth opportunity so that they can rapidly build their wealth and participate in the rewards of asset ownership.

China Dairy situation update

The USDA GAIN report (available here) gives some insight in to what is going on in China - and it is basically pretty good news.