Forward wool market trades firm to higher

Michael Avery, Southern Aurora Markets partner, January 14, 2022

Southern Aurora Markets partner Mike Avery.

WOOL auction sales this week delivered on the expectations of supply pipeline participants with a brighter start to 2022.

All micron groups rose steadily across the week as buyers looked to fill commitments and balance their books after the three-week recess.

Forward markets continued their recent trend of trading at spot or a slight premium to cash with buyers keen to hedge where they can lock in a margin. Although trading volumes remain light potential for risk management was evident up to 20 months forward with 19 micron trading in September at 2023 cents and at cash at 1700 cents. In October 2022, 19 micron traded at 1715 cents.

The percentile chart below indicates that, especially on the finer microns, we are now sitting above the 70th percentile for prices for the last 12 years.

We anticipate continued interest and the forward curve to remain flat to a slight premium.

Recent trades

February 18 micron                                                       2100 cents                        2.5 tonnes

February 30 micron                                                          375 cents                         5 tonnes

March 18 micron                                                           2100 cents                        5 tonnes

May 19 micron                                                               1680/5 cents                   10 tonnes

October 19 micron                                                        1715 cents                          2.5 tonnes

September 2023 19 micron                                         1700 cents                          5 tonnes

Total 30 tonnes

Source: Southern Aurora Markets.


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