Forward 19 micron wool contract the only bright light

Michael Avery, Southern Aurora Markets partner, August 25, 2023

Southern Aurora Markets partner Mike Avery.

But I know, somehow, that only when it is dark enough can you see the stars.” 

― Martin Luther King, Jr.

IT has been another dark week for Australia’s wool auctions, but there was one bright light in forward trading.

All Merino wools were affected at auctions this week, dropping 3-5 percent.

The bearish outlook for the global economy, particularly our largest trading partner China, is weighing heavily on most commodity markets.

The forward trading market reflected the short-term outlook, with the buyers starting the week bidding 1-2pc under spot in the nearby months and seeing sellers waiting for direction.

The only transaction early this week was on the 21 micron contract that traded 20 cents under last week’s close. The spot rapidly pushed through the 1315-cent contract price, with the index dropping 40 cents on open and a further 30 cents on Wednesday to close at 1260 cents.

The only bright star on the horizon is the 2024/25 strip for 19 microns being bid 80 cents over the closing quote of 1400 cents. It is bid July 2024 to June 2025 at 1480 cents. While writing the report two of these back month’s traded as growers took a little insurance.

This week’s trades

August 2023                                                       21 microns                          1315 cents                          5 tonnes

July 2024                                                              19 microns                          1480 cents                          5 tonnes

September 2024                                               19 microns                          1480 cents                          5 tonnes

Total 15 tonnes


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