Forward wool markets remain quiet with auction decline

Michael Avery, Southern Aurora Markets partner, June 16, 2023

Southern Aurora Markets partner Mike Avery.

DISAPPOINTMENT continued for Australia’s wool auctions this week and the forward market remained quiet.

The steady decline that started in February has continued to the point where the chartists are looking for the next level of support.

The geopolitical uncertainty and macro-economic outlook have dogged most agricultural commodities for most of this year.

The strong US dollar of the last fortnight has accelerated the Australian dollar decline of wool prices with the local currency strengthening nearly 5 percent.

The 19-micron price guide (MPG) peaked for the year at A1776 cents/US1238 cents at a time when the AUD/USD rate was US69.7 cents. Since then, the market has fallen to A1471 cents/kg or US1000 cents.

The root cause of the fall remains the lack of customer and consumer confidence in these tentative times.


The forward market remains quiet, with all the activity centred around 2024. Early in the week, the first and second quarters of 2024 traded at 1550 cents – a 2pc premium to the opening cash. The 50-cent fall in the spot auction market saw the 2024/25 levels retract 30 cents to 1520 cents and traded at this level for May and September.

With most micron categories breaking or sitting on long-term support levels, predicting the short and medium direction of the market is proving problematic. Current lack of bidding levels into the new season indicates the lack signals coming from offshore.

We will likely need to see stability in the spot market before any confident bidding and offering returns to the forwards. In the meantime, the premiums bid in 2024/25 provide the only hedge opportunities.

Recent trades

March 2024 19 micron                                  1550 cents                        5 tonnes

April 2024 19 micron                                      1550 cents                         5 tonnes

May 2024 19 micron                                      1520 cents                         5 tonnes

September 2024 19 micron                          1520 cents                         5 tonnes

Total 20 tonnes

Source – Southern Aurora Markets.


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