THE auction market continued to struggle to find a level this week, with 19 micron wools losing around 40c/kg and 21 micron lines dipping 25c/kg as exporters have difficulty finding offshore demand.

Processors continue to look for further relief from a market that has trended upwards for 28 months. It is important to note that during that upward channel the market has suffered numerous retractions. The deepest in the March-April period last year was 10 percent and there was an 8pc fall in the early spring of 2017. The latest fall for 19 microns is 6.6pc and for 21 micron 4pc.

The forward market is pricing a similar pattern for this season, but off the higher levels achieved this February.

The 21 micron levels look more attractive as the forward market is indicating that the difference between 19 and 21 micron will hold around the current 200-cent mark. This is about the average of the last two years and above the longer term (10 year) average of 84 cents, but below the peak of 471 cents achieved in March 2017.

Anticipated trading levels

Month                                 19 micron                           21 micron

March                                 1980 cents                         1820 cents

April                                     1960 cents                         1780 cents

May                                     1940 cents                         1750 cents (Spot May 2017 19u 1920c, 21u 1500c)

June                                     1940 cents                         1750 cents (Spot June 2017 19u 1860c, 21u 1530c)

July                                      1900 cents                         1700 cents

Aug                                      1870 cents                         1670 cents

Sept                                     1850 cents                         1640 cents (Spot Sept 2017 19u 1800c, 21u 1550c)

Trade summary

April                                     19 micron       2020 cents                               7 tonnes

April                                     21 micron       1820/1850 cents                   13 tonnes

May                                     21 micron       1795/1840 cents                      7 tonnes

June                                     19 micron       1960 cents                                 5 tonnes

June                                     21 micron       1760 cents                                 5 tonnes

Total 37 tonnes

Source: Southern Aurora Markets.