SENTIMENT improved in the forward trading of Australian wool this week as the auction market looked to find a level.
The spot wool auction market started the week listlessly, recording losses over the first two days.
There was little confidence shown over the Easter and Chinese holiday break and this translated to the Merino qualities continuing to lose ground, as they had done for nine of the last 10 auction days dating back to the beginning of March.
Sentiment improved in the forward market late Wednesday as the market looked to find a level. Solid bidding on the forwards led to the 21 micron contract in May trading close to cash and triggering renewed interest in the spring and beyond.
Although the market still has a forward discount from an historical position the hedging strategy taken by sellers this week looks sound.
The 18 micron index traded at 2200c/kg clean for August 2018. This compares to the AWEX 18 micron MPG position in August 2015 of 1470c/kg, 1533c/kg in 2016 and 2150c/kg in 2017.
The 19 micron index traded at 1980c/kg for June 2018. This compares the AWEX 19 micron MPG position in June 2015 of 1484c/kg, of 1475c/kg in 2016 and 1860c/kg in 2017.
The 21 micron index traded at 1710c/kg for September 2018, compared to the AWEX 21 micron MPG position in September 2015 of 1290c/kg, 1550c/kg in 2016 and 1413c/kg in 2017.
Trading interest pushed out to June 2019 with 21 micron trading at 1600c/kg.
The spot auction closed Thursday strongly with Merino qualities retracing most of the losses of earlier in the week to finish unchanged on last Thursday. Crossbreds maintained their momentum of the last month, gaining another 30 cents this week.
Anticipated levels next week
Month 19 micron 21 micron
April 2000 cents 1865 cents
May 1990 cents 1865 cents
June 1980 cents 1830 cents
July 1950 cents 1770 cents
Aug 1900 cents 1730 cents
Sept 1850 cents 1710 cents
May 2018 21 micron 1850/1865 cents 12.5 tonnes
May 22 micron 1795 cents 4 tonnes
June 19 micron 1980 cents 20 tonnes
July 19 micron 1920/1950 cents 9 tonnes
July 21 micron 1780/1800 cents 4.5 tonnes
August 18 micron 2200 cents 10 tonnes
August 19 micron 1900 cents 9 tonnes
September 21 micron 1710 cents 2.5 tonnes
June 2019 21 micron 1600 cents 10 tonnes
Total 81.5 tonnes