FORWARD wool markets traded strongly this week, buoyed by continued strength in Australia’s physical auctions.
The 18.5 micron forwards broke new ground, trading at 2000 cents in November, 1955 cents in January and 1950 cents in April. The forward curve has flattened on all micron groups, with Merino qualities all showing spot prices of in excess of the 90th percentile.
Volumes improved marginally this week with 74 tons traded. This only represents only 1.6 percent of the underlying auction throughput this week. With prices at record spring levels, growers are yet to embrace the value of certainty over the fear of lost opportunity. Too much emphasis is being placed on the backwardation of forward curve and not on the absolute price being offered both pre- Christmas and into the New Year.
In dollar terms per bale autumn forwards represent 18.5 microns at $2400/bale, 19 micron at $2200/bale and 21 microns at $1900/bale. Pre-Christmas levels are at a 2pc premium to these levels.
Anticipated trading levels next week
18.5 micron 19 micron 21 micron
November 2000 cents 1870 cents 1560 cents
December 1980 cents 1850 cents 1550 cents
Jan to March 1950 cents 1830 cents 1530 cents
April to June 1930 cents 1810 cents 1500 cents
November 18.5 microns 2000 cents 2.5 tonnes
January 18.5 microns 1955 cents 10 tonnes
February 19 microns 1820 cents 3 tonnes
February 21 microns 1530 cents 10 tonnes
March 20 microns 1600 cents 2 tonnes
March 21 microns 1510/1530 cents 6.5 tonnes
April 18.5 microns 1950 cents 3 tonnes
April 19 microns 1800/1825 cents 16 tonnes
April 21 microns 1505/1530 cents 21.5 tonnes
Total 74.5 tons