July 5th, 2012

Milk Futures – Goldman Sachs Group Inc. says this may be the first time in five years that New Zealand, the world’s biggest dairy exporter, produces less milk, at a time when surging corn prices are raising costs for U.S. farmers.

The country’s output will drop 2.4 percent in the 12 months ending June 30 as the weather turns less favorable, according to Goldman’s New Zealand unit. Supply from the seven biggest exporting regions may gain 1.2 percent in the second half of 2012, slowing from 3.2 percent in the first six months, according to Rabobank International. Futures, which rose 20 percent since mid-April, will climb a further 15 percent to $20 per 100 pounds in Chicago by Dec. 31, said Shawn Hackett, the agricultural advisor who correctly predicted the rally in March.

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