IT was an interesting week for the wool market, with the solid opening to the New Year physical auctions last week expected to be tested.
Another 50,000-bale roster, a high Australian dollar, irregular demand and pending Chinese New Year were all seen as head winds for the market.
Against that backdrop, prices were strong across all sectors this week, with the fine wools particularly buoyant.
The 17 and 18 micron types rose steadily across the three days of sales, gaining momentum to close the week significantly higher — 17 micron was up 100 cents and 18 micron up 60 cents. In general, the rest of the Merino qualities and the crossbreds started the week softer, but closed on a better tone.
This pattern feed into the forward markets. The early trade and bidding on Monday and Tuesday were subdued with 19 micron contract trading at 1390 cents for March, 40 cents off last week’s high. Bidding picked up as the week progressed, with prices higher and maturities expanding out to June 2022.
The forward market closed the week bid at strong premiums for Summer and Autumn 2021 and with premiums into Spring 2021. The first half of 2022 was also bid at a premium for the 19 and 21 micron contracts, presenting growers with long term maturities not seen for a considerable time and a forward curve in carry.
Indicative trading levels next week
18 micron 18.5 micron 19 micron 21 micron 28 micron
Closing spot in south only 1693 cents 1561 cents 1428 cents 1169 cents 483 cents
Feb 1700 cents 1570 cents 1440 cents 1180 cents 488 cents
March/April 1700 cents 1570 cents 1440 cents 1180 cents 488 cents
May/June 1700 cents 1570 cents 1440 cents 1180 cents 488 cents
Sept/Oct 1430 cents 1170 cents
Nov/Dec 1430 cents 1170 cents
Jan to June 2022 1430 cents 1170 cents
This week’s trades
March 19 micron 1390 cents 5 tonnes
Source – Southern Aurora Markets.