Southern Aurora Markets partner Mike Avery.

“I have learned over the years that when one’s mind is made up, this diminishes fear; knowing what must be done does away with fear.” — Rosa Parks

AUSTRALIA’S wool auction series this week opened with the largest single day fall since last August.

On the forward market, the sellers’ reactions were to snap up available bids. Trading was predominantly at a premium to spot.

The exception was the 21 micron contract that was executed at 1300 cents for April and May (cash 1312 cents). Trading was spread over 12 months to March 2025.

The spot auction market stabilised on Wednesday, suggesting sellers may have reacted a bit quickly. The lack of new bidding to return to the forwards might suggest the market remains vulnerable. Even so as ice hockey great Wayne Gretzky would say “You miss 100 percent of the shots you didn’t take”.

Sellers now have some forward certainty and buyers have hedged some forward positions. So, what is ahead?

The macro-economic situation remains tentative at best. Uncertainty reigns and consumer confidence low. This is balanced by most price levels lingering at or below long-term averages.

Seasonally, it is also a mixed bag. If we look at the post-Easter price action over the last 14 years, the market has become dearer as we move to the end of the season in June on five occasions, moved cheaper on five and sideways on four. In this ambiguous circumstance the strategy for those in long positions (growers and stockholders) should be looking to establish target levels to take advantage of any price rallies when buyers will be looking to hedge their risk.

We approach the final sale prior to the one-week Easter recess with 50,000 bales on offer.

Hopefully, the need to cover forward export commitments will see further support to stabilise prices.

This week’s trades

April 21 micron                                                  1300 cents                            10 tonnes

May 19.5 micron                                               1370/1410 cents                   7.5 tonnes

May 21 micron                                                  1300 cents                               7 tonnes

June 19 micron                                                  1415 cents                               7 tonnes

December EMI                                                 1170 cents                               5 tonnes

March 2025 19.5 micron                                 1500 cents                               5 tonnes

Total 41.5 tonnes

Source – Southern Aurora Markets.