THE spot wool auction market closed Wednesday ahead of the three-week winter recess with all microns posting gains.

The magnitude of the increases varied widely as selection and the need to catch vessels saw irregularities in the indices, with 19 and 21 micron values dropping 95 cents throughout June.

The tight auction selection has seen 21 micron recover 45 cents in the two sale weeks of July, while the 19 micron indice has remained relatively stable, gaining just 2 cents.

The forward market has taken this into consideration, with buyers flattening the 19 micron forward curve by bidding just under cash (1276 cents) through the spring and early summer. The discount further out has tightened, with bidding pegged at 1245 cents (-2.5 percent) from November through to April 2021. Prices further out into the start of the 2020/21 season have been varied, but are holding up above 1200 cents.

The forward market traded 66 tonnes for the week, all focused on the 19 micron index, with maturities split evenly in the later half of 2020 and post-Easter 2021.

Forward prices were generally concentrated in a narrow range. August, September and October all traded at 1265 cents and April/May 2021 trading at 1245 cents. November 2021 traded at 1238 cents, showing the value of growers having a level in the market when spot prices are so volatile.

Although the next three weeks will be devoid of open cry auctions, we expect some opportunities will still be available for growers over the recess on the forward market. Exporters will still be looking to keep their books balanced and demand will still rely on the macro drivers centred around global health outcomes.

Valuing certainty over the fear of lost opportunity seems more relevant now than ever.

Indicative forward levels

19 micron                             21 micron

Aug/Sept                                           1265 cents                         1170 cents

Oct                                                      1265 cents                           1165 cents

Nov                                                     1245 cents                           1145 cents

Dec/ Jan                                            1245 cents                           1140 cents

Feb/April                                            1245 cents                           1140 cents

May/June                                          1230 cents                           1130 cents

Trade summary this week

August 19 micron                             1265 cents                         5.5 tonnes

September 19 micron                     1265 cents                        20 tonnes

October 19 micron                          1265 cents                          5 tonnes

November 19 micron                      1230/40 cents                   4 tonnes

April 19 micron                                  1245 cents                          5 tonnes

May 2021 19 micron                       1245 cents                        25 tonnes

Nov 2021 19 micron                       1238 cents                          2 tonnes

Total 66.5 tonnes