Global dairy prices edged higher at an auction after moderating in recent months, with analysts saying prices could continue to rise as wet weather in New Zealand hits production.

The GDT Price Index edged up 0.3 percent, with an average selling price of $3,323 per ton, in the auction held in the early hours of Wednesday morning.

Prices have fallen in four of the last six auctions but this follows a strong three-month rally earlier this year, which gave farmers confidence that a dairy price recovery was here to stay.

A total of 33,501 tons was sold at the latest auction, an increase of 3.8 percent from the previous one, the auction platform said on its website.

"We see potential for prices to break this holding pattern and push higher over coming months," ASB said in a note.

"Firstly, NZ weather has been poor (very wet) and production is reportedly back on last season in key regions at this stage. Secondly, global milk fat (butter) demand continues to surge, while supply struggles to keep pace."

Indeed the price of butter jumped 3.8 percent, and lactose surged 5.1 percent. Prices for whole milk powder, a major New Zealand export, fell 1.6 percent, undershooting some expectations in the market for a rise.

The auctions are held twice a month, with the next one scheduled for Sept. 19.

The auction results can affect the New Zealand dollar as the dairy sector generates more than 7 percent of the nation's gross domestic product. The New Zealand dollar was little changed at $0.7239.

GDT Events is owned by New Zealand’s Fonterra Co-operative Group Ltd , but operates independently from the dairy giant. U.S.-listed CRA International Inc is the trading manager for the twice-monthly Global Dairy Trade auction.