Southern Aurora Markets partner Mike Avery.

THE auction wool market continued its steady track to the mid-year recess with little forward marketing this week.

Most qualities gained some ground at auctions, buoyed by a stronger USD.

Medium Merinos, 20 to 22 microns, fared the best, gaining one percent for the week.

Little inspiration has been found for the market in general. This has been the case for the whole of the year.

The first quarter promise that captivated most commodity markets dissipated during April. The last two months has seen prices grind along as diminishing supply matches weak demand.

Any consumer confidence or pipeline stimulus has been snuffed out by the erratic conduct on the global stage.

Forward markets have suffered the same tedium. The lack of confidence along the pipeline has reduced physical forward sales and the necessity to hedge positions. Willingness is there on the exporter side evidenced by pricing into the spring and summer, albeit in limited quantities. This was borne out with trades executed for October at a 10-15 cent premium to cash.

Light offering at auction for the last two weeks prior to the mid-year brake should see a continuation of the status quo at auction.

Forwards are likely to remain steadily bid but unlikely to be in large volumes. Sellers will feasibly be able hedge above current spot but probably only at modest premiums.

Trades this week

October 19.5 micron                                                    1475 cents                         5 tonnes

October 21 micron                                                        1435 cents                         5 tonnes

Source – Southern Aurora Markets.