Southern Aurora Markets partner Mike Avery.

‘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.