Persistent heavy rain in New Zealand, the world’s largest exporter of dairy products, spurred record trading in NZX dairy futures yesterday as traders bet soggy pastures heading into winter will dent future milk production.
A total of 4,680 futures contracts for whole milk powder, skim milk powder, anhydrous milk fat and butter were traded through the NZX yesterday, up from the previous daily record of 4,244 lots traded on September 8 last year, NZX said. Prices for whole milk powder futures contracts for May through October gained, while futures contacts for skim milk powder and butter were mixed, with some months gaining and others unchanged.
Heavy rain has caused disruption across the country the past week, particularly in the Bay of Plenty region where a state of emergency has been declared as a low-pressure system and the tail end of Cyclone Cook signal more downpours ahead. That’s caught the attention of traders, who have stepped up their activity at the tail end of the New Zealand milk production season on concern the extreme weather conditions could dent production next season and push up prices.