Before today, whole milk powder prices had sunk by 18.6 per cent since peaking in March at US$4364 a tonne.
Much of the slide in New Zealand's single biggest export product has been put down to greater-than-expected production over the autumn months, which meant more supply came on stream than would normally have been the case.
Fonterra's forecast range for the current season is $7.25 to $8.75 per kg of milksolids, with an $8 mid point.
Mike McIntyre, Jarden's head of derivatives, said today's price action was an encouraging rebound that would be supportive of the current milk price forecast for 2022.
Analysts said much would depend on how the key production months of September, October and November unfold, and to a lesser extent December, January and February.
"It was a fantastic result," McIntyre said.
"There was quite broad-based support.
"We saw buyers come in from some of the lesser traditional regions - not just China - so there's good interest out of the Middle East and South East Asia, which was encouraging.
"And there was support right across the product suite."
Fonterra has over the past two months taken 16 per cent of the originally forecast quantity of whole milk powder off the Global Dairy Trade auction platform, so the impact of that in terms of higher prices was not unexpected.
"But what was encouraging was that there was good results for both skim milk powder and the fat products as well," McIntyre said.
An unexpectedly strong surge in milk production over the autumn months had weighed on prices over most of the year, but McIntytre said most of that increased production would now have been spoken for.
Westpac senior agri economist Nathan Penny said, on the surface, global dairy markets appeared to have cleared the massive lift in New Zealand production over autumn.
"However, the major movement of product off the auction platform by Fonterra clouds this picture to a degree," he said.
The recent skim milk powder price strength is clearer cut, as it reflected soft European production over recent months, he said.
"From here, we expect the strength or otherwise of New Zealand spring production will begin to provide fresh impetus for prices in either direction," he said.
On that front, growing conditions had been good in the Waikato and Southland, while in Canterbury conditions have begun to improve after a cold winter.
"All up, we see the global dairy market as being largely balanced at this point, with prices settling at a healthy level," he said.
On that basis, Penny was sticking with his forecast of a $7.75/kg farmgate milk price for 2021/22.
He noted it was still relatively early in the season and there remained a wide range of possible milk price outcomes on both sides of that forecast.
Most dairy farms are deemed profitable when the milk price reaches or exceeds $7kg.
Among the other dairy products on sale at this morning's auction, butter prices firmed 3.7 per cent to an average US$4948/tonne.
Cheddar followed close behind - up 3.6 per cent at an average US$4328/tonne.
Anhydrous milk fat rose 3.1 per cent to an average US$5970/MT, and lactose climbed 6.4 per cent to an average US$1167/MT.
Butter milk powder rounded off a full sweep of positive results, up 3 per cent to an average US$3287/tonne.