Forward wool market trades in light volumes

Michael Avery, Southern Aurora Markets partner, March 31, 2023

Southern Aurora Markets partner Mike Avery.

THE forward wool market continued to trade in light volumes, in another week of mixed results at spot auctions.

Spot demand remains steady and supply varied, which was very evident with Fremantle markedly dearer over its two selling days with a selection that closely matched buyers demands.

The eastern states, with a diverse selection, had assorted results with 19 micron and coarser Merino wools a shade dearer, but finer wools again losing ground.

The majority of the forward trading was again executed early in the week, with the confidence on the buy side again focused on the 21 micron contract. Generally, trading was limited to the nearby months, with the only outlier being a July trade in 19 micron 20 cents under cash.

New season and 2024 bidding is almost non-existent. Sellers for the Spring and beyond remain positioned at a premium to spot, so it is unlikely that we will see any major activity further along the curve until very have a break from the current sideways movement in the spot market.

The wool market is following the year-to-date trend for most agricultural commodities. That is, a solid start followed by a February peak and tail off to into the end of the first quarter.

We move into the last sale prior to the Easter recess with another 53,000 bales on offer. The likelihood of large movement either way remains driven by the macro-economic and political environment. Sentiment at present is neutral at best.

This week’s trades

April 21 micron                                                               1425 cents                         5 tonnes

May 19.5 micron                                                           1600 cents                         5 tonnes

May 21 micron                                                               1425/40 cents                  15 tonnes

July 19 micron                                                                1630 cents                           2.5 tonnes

Total 27.5 tonnes.


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