‘An optimist is the human personification of Spring.’ – S.J. Bissonette
IT is difficult to describe the action of the spot wool auction market this week.
Tuesday delivered a welcome relief to a market that had treaded down since sales recommenced in early August.
Prices have retreated 5-7 percent during the month. The surge in activity saw levels lift around 10 to 15 cents across most microns.
A bounce was anticipated as rarely do markets fall or rise in a straight line. The fact that the demand on Wednesday fell away and half of the gains were immediately given back did surprise.
The forward markets were a little more active. The premium strip offered at 1480 cents for 19 microns offered in the second half of 2024 (against spot at 1400 cents) was too good for hedgers to refuse on the forward markets.
Each month July to December traded prior to the auction open. The flurry Tuesday saw buyers step up and take the best value in the prompt quarter. October traded 19 microns at 1380 cents and November 18 micron at 1515 cents. Both represented 20 cents under cash.
With little else on offer buyers remained patient. That cautious approach with Wednesday’s spot auction was disappointing.
As for next week, it is difficult to be optimistic although some of Wednesday’s weakness can be put down to selection and a slightly stronger Australian dollar. Still the macro economics of our major trading partners will drive the direction.
As suggested prior, it is fine to be optimistic, but always have a Plan B. Hopefully, Spring will deliver another rally to hedge off.
This week’s trades
This week’s trades
October 2023 19 micron 1380 cents 2.5 tonnes
November 2023 18 micron 1515 cents 5 tonnes
July 2024 19 micron 1480 cents 5 tonnes
August 2024 19 micron 1480 cents 5 tonnes
September 2024 19 micron 1480 cents 5 tonnes
October 2024 19 micron 1480 cents 5 tonnes
November 2024 19 micron 1480 cents 5 tonnes
December 2024 19 micron 1480 cents 5 tonnes
Total 37.5 tonnes
Source – Southern Aurora Markets.