Prices of dairy products rebounded from a three-year low as buyers returned to the market, posting their biggest gain in almost two years, led by skim milk powder and anhydrous milk fat.
The GDT-TWI Price Index rose 13.5 percent compared to the last sale in mid-May. The average winning price rose to US$2,899 a metric tonne, the highest since April. The price of skim milk powder jumped 21.3 percent to US$3,011 a tonne. Whole milk powder rose 8.5 percent to US$2,763 a tonne.
The average price at the sales rose for only the third time this year and weakening prices prompted Fonterra last month to cut its forecast 2012 milk payout and flag lower payments in 2013. The decline has mirrored a broader trend in commodities amid doubts about global demand.
The Thomson Reuters/Jefferies CRB Commodity Index edged up about 0.1 percent overnight from the lowest in almost two years. Anhydrous milk fat rose 24.4 percent to US$3,096 a tonne in the latest auction.
Cheddar climbed 9.4 percent to US$3,189 a tonne. Butter milk powder sold at an average US$2,456 a tonne while lactose declined 1.3 percent to US$1,992 a tonne. Milk protein concentrate rose 10.9 percent to US$4,339 a tonne.
Rennet casein rose 19.6 percent to US$6,890 a tonne. There were 106 winning bidders over 16 rounds, the longest auction since November last year. There were 170 participating bidders, the highest since the Dec. 6, 2011, sale. The number of qualified bidders rose to 649 from 635.