Forward wool market steadies as auction prices slip

Michael Avery, Southern Aurora Markets partner, May 27, 2022

Southern Aurora Markets partner Mike Avery.

THE forward wool market remained steady as auction prices lost ground across Australia this week.

All Merino qualities moved down around 1 percent at auction as the market found resistance after three weeks of positive moves.

The forward market remained steady with the focus mainly on the nearby months as buyers looked for certainty into the close of the season. A broad range of microns were traded — from 18 micron through to 21 micron at flat to cash. Buyers remain cautious into the Spring, but are willing to cover sales as they occur.

In the key 19 Micron Price Guide, forward trades have been relatively consistent, with long-term resistance in the New Year at 1700 cents. Closer in prices have been a little more variable, reacting to short-term volatility in the spot market and in the currency.

Forward levels next week are expected to remain relatively stable. The risk off attitude of the market seems to still be in place. Opportunities to hedge forward will still be there, although turnover remains restricted.

19 MPG                               21 MPG

May to July 2022                               1720/1730 cents               1320/1340 cents

August to December 2022               1690/1705 cents               1310/1320 cents

January to July 2023                        1690/1700 cents               1270/1300 cents

August to December 2023               1680/1700 cents               1280/1310 cents

This week’s trades

June 18 micron                                                2200 cents                         5 tonnes

June 18.5 micron                                            1970 cents                         5 tonnes

June 19 micron                                                1740 cents                         5 tonnes

June 19.5 micron                                            1560 cents                         5 tonnes

June 21 micron                                                1335/50 cents                   7 tonnes

September 19 micron                                    1695 cents                        10 tonnes

November 17 micron                                     2510 cents                         5 tonnes

Total 42 tonnes

Source: Southern Aurora Markets.


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