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Word from New Zealand about future dairy price seems grim: http://www.stuff.co.nz/business/4814594/Futures-point-to-dairy-price-sag
"New Zealand's run of strong dairy prices could be ending with the price of contracts on the NZX's Dairy Futures market sagging as 2011 progresses.
Releasing its half-year results this past week, Fonterra announced 2011 was shaping up as one of the best ever in terms of returns to its farmer shareholders.
However, prices on the NZX's new futures market, which is starting to see solid growth in trading, ebbs from $US4205 ($5600) for contracts maturing in March to $US3885 from October onwards, a drop of nearly 8%."
(more at link)
So, what is NZX's "Dairy Futures" market: http://www.nzx.com/about-nzx/4224534/NZX-Dairy-Futures-record-first-trade
"NZX Dairy Futures traded for the first time today. Ten lots of the October 2010 Global Whole Milk Powder future traded at US$3,525/t. NZX Dairy Futures launched on 8 October.
During the first two days of operation there were up to 30 lots on offer in each of the front seven expiry months, which represented 210 lots total volume on offer with a US$792,000 notional value.
“We're confident that demand for NZX Dairy Futures will continue to build, and we look forward to welcoming additional participants to the market in the near term,” said NZX Head of Markets Fiona Mackenzie.
The NZX Dairy Futures market is an anonymous market and the firms making individual trades are not disclosed."
NZX has gone from 10 trades in October 2010 to 20 trades in February 2011 - pretty exciting (see above). OK 20 trades in February but, no indication as to the number of traders? Maybe there are five traders or maybe ten or maybe just the ruler of Oz.
We do need to firm up the meaning of market because at this point it seems to be just the will of those with power.