The hot US weather which raised corn prices, and seen as a threat to cattle values, may be having a hand in underpinning the global dairy market, by stemming a rise in US production.
FCStone said that dairy prices may, after tumbling 40% at globalDairyTrade auctions between March 2011 and May this year, have bottomed out, given the resilience seen in the last two session.
While dairy prices at the latest auction, on Tuesday, overall eased 0.5%, this retreat gave back only a fraction of the near-14% gained in the previous event, two weeks ago.
And prices of some commodities extended their recovery, with whole milk powder, used in products such as yoghurt, and which forms the bulk of globalDairyTrade sales, taking to 11% its gains over the past month.
“It is hard to call the bottom, but it seems we have reached that point. It probably is a bottom,” FCStone dairy and commodity analyst David Kurzawski told Agrimoney.com.
Read more at Agrimoney