New Zealand- ASB stick with their $NZ4.50 milk price forecast for this season

Comments from ASB today after the stronger overnight dairy auction:

Key highlights

• Dairy prices bounce overnight, ending the 10-auction falling streak.
• Weak market sentiment is dissipating and focus is turning to a soft NZ production outlook.
• We stick with $4.50/kg for this season, but note the dairy price recovery's long road ahead

More:

• The circuit breaker that dairy markets have long needed is now in hand. Market focus has shifted from dairy's global glut to a potential fall in NZ production this season.
• As a result, we expect the prices to recover much of the preceding three auction's lost ground.
• But from there, further lifts become more difficult.
• In that respect, the auction lift reinforces our relatively optimistic $4.50/kg milk price forecast for this season. But it doesn't alter the medium-term picture materially. On that front, we now expect a more gradual recovery and have lowered our 2016/17 forecast to $6.50/kg accordingly, and this forecast's risks still point down.