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The Bank of New Zealand (BNZ) has increased its milk forecast for 2020-21 to NZD7.70/kg milk solids (ms) vs. the previous NZD7.40/kg ms, per Reuters.

The move came after the latest New Zealand GDT Price Index figures rallied to the highest since September 2015 while flashing a 15.0% mark in its latest reading versus 3.0% prior on Tuesday. Further details suggest the average prices of the Whole Milk Powder (WMP) rose to the seven-year top of  $4,364/MT on Tuesday.

It should also be noted that the Australia and New Zealand Banking Group (ANZ) has earlier cited a reduction in the volumes sold while suggesting  NZD7.20/kg MS and NZD6.40/kg MS for the current and next season respectively.

Market implications

Although the news offered a bounce to the NZD/USD prices from an intraday low of 0.7236 to 0.7243, the overall risk-off mood, mainly due to rising Treasury yields, keep bears hopeful.

Read:  NZD/USD Price Analysis: Rebound from intraday low stays doubtful unless crossing 0.7310