September 5, 2017 / 10:27 PM / a year ago

UPDATE 1-Dairy prices bounce, seen rising further on wet NZ weather

 (Updates throughout, adds quote)
    WELLINGTON, Sept 6 (Reuters) - Global dairy prices edged
higher at an auction after moderating in recent months, with
analysts saying prices could continue to rise as wet weather in
New Zealand hits production.
     The GDT Price Index edged up 0.3 percent, with an average
selling price of $3,323 per tonne, in the auction held in the
early hours of Wednesday morning.
    Prices have fallen in four of the last six auctions but this
follows a strong three-month rally earlier this year, which gave
farmers confidence that a dairy price recovery was here to stay.
    A total of 33,501 tonnes was sold at the latest auction, an
increase of 3.8 percent from the previous one, the auction
platform said on its website.
    "We see potential for prices to break this holding pattern
and push higher over coming months," ASB said in a note.
    "Firstly, NZ weather has been poor (very wet) and production
is reportedly back on last season in key regions at this stage.
Secondly, global milk fat (butter) demand continues to surge,
while supply struggles to keep pace."
    Indeed the price of butter jumped 3.8 percent, and lactose
surged 5.1 percent. Prices for whole milk powder, a major New
Zealand export, fell 1.6 percent, undershooting some
expectations in the market for a rise.
   The auctions are held twice a month, with the next one
scheduled for Sept. 19.
    The auction results can affect the New Zealand dollar       
as the dairy sector generates more than 7 percent of the
nation's gross domestic product. The New Zealand dollar was
little changed at $0.7239.
    GDT Events is owned by New Zealand’s Fonterra Co-operative
Group Ltd         , but operates independently from the dairy
giant. U.S.-listed CRA International Inc          is the trading
manager for the twice-monthly Global Dairy Trade auction.

 (Reporting by Ana Nicolaci da Costa; Editing by Phil Berlowitz)
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