Why I Chose Dairy

When building a framework to analyse and trade commodities, I needed a sector that was data-rich, structurally complex, and globally relevant — yet not dominated by algorithmic macro flows. Dairy fitted that role perfectly.

Unlike grains, energy, or metals, dairy markets remain highly regional in pricing and logistics. Futures markets like CME’s Class III and Class IV Milk, EEX’s European butter and powder contracts, and NZX’s Global Dairy Trade derivatives all reference real physical supply chains that still respond to local weather, feed costs, and policy decisions. That combination of physical fundamentals and financial structure makes dairy an ideal environment to test an analytical approach.

From a systems perspective, dairy has several advantages:

• Diverse instruments, shared inputs. Milk, butter, whey, and powder are chemically linked, creating natural cross-commodity relationships and arbitrage opportunities.
• Transparent yet under-analysed. Exchange-quoted futures and public auction data (GDT) provide consistent benchmarks, but few professionals visualise or model them comprehensively.
• Regional differentials. Comparing CME and EEX prices introduces currency, freight, and policy layers — ideal for testing multi-market analytics.
• Moderate liquidity. Sufficient depth for analysis without the noise that often clouds macro commodities.

For me, dairy acts as a laboratory for the entire methodology: gathering fragmented data, standardising it across currencies and units, and deriving transparent insight from real fundamentals.
If an analytical model performs well here — where biological lags, seasonal production cycles, and evolving demand patterns all meet — it is likely to perform well anywhere.

Dairy is not the easiest market to understand, but that is precisely why it is the right test case. It rewards structure, curiosity, and clarity — three principles that define how I approach every market.

The list of tradable dairy futures below illustrates the breadth of this market — from U.S. milk and butter contracts to European powders and New Zealand’s GDT derivatives — and highlights the global yet interlinked structure that makes dairy such an effective proving ground for analytical models.