FURTHER signals of strong international dairy markets have followed the surprise 25% recovery in milk prices in the monthly auction run by Fonterra of New Zealand.
Milk futures in Chicago rose towards a two-year high this week, after US butter exports for the first half of 2010 soared 260% compared to 2009, and cheddar cheese shipments rose 189%.
China, Japan and South Korea were among the major buyers, as the US exported dairy products worth $2.03 billion in the first seven months, up 66% from 2009.
Meanwhile, Rabobank analysts said Russia entering the dairy market with renewed vigour in recent weeks was behind the jump in Fonterra milk auction prices.
Rabobank analysts said further Russian buying will be crucial to the continuation of the dairy rally, because summer milk production has grown by 4-5% across Argentina, New Zealand, and Australia; by 2.2% in the US, and 0.9% in the EU.
There are mixed signals also in the grain markets which will determine tillage farm prospects and this winter’s livestock feed costs.
Predictions of a bumper Australian wheat harvest over the coming months are cooling international grain markets this week.
If weather conditions remain favourable, Australian wheat exports could approach their second highest level on record, of more than 18.4m tonnes, according to the country’s Bureau of Agricultural and Resource Economics.
However, reports that the British barley harvest is expected to come in at just five million tonnes, the lowest in 49 years, could be of more relevance to the Irish market, because it means barley from Britain is likely to priced close to wheat.
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