Better than feared

Futures market pricing had suggested price falls in the 4-5% range after the last disastrous auction a fortnight ago. The market was thus rightly on edge, notes Eckhold.

"Overall prices rose slightly driven by a strong performance from the 'Fats' - Anhydrous Milk Fat 4%, Cheddar 6.2%, Butter 0.8%) while the 'Powders' fell - albeit by less than feared (Whole Milk Powder -1.6%, Skim Milk Powder -1.1%)," he says.

"We didn't see much of interest in the pattern of buyers - Middle Eastern buyers were better supporters of the auction this time. Chinese demand looks stable.

"Our forecast for the 2024-25 milk price remains unchanged at $8.40 with balanced risks. Of key interest will be the impact of weak Chinese economic growth, which recent data confirms is still travelling below trend, driven by a still weak consumer. That's not great news for soft commodities."