Southern Aurora Markets partner Mike Avery.
“It isn’t the ups and downs that make life difficult; it’s the jerks.” – Charlie Chaplin.
FORWARD wool traders were more active in another testing week for the spot auction, with the market again faced the headwinds of a stronger AUD and uncertain global condition.
Tuesday’s spot auction was surprisingly solid, with the benchmark Eastern Market Indicator rising 0.4 percent in AUD terms and almost 2pc in USD. On Wednesday, some of those gains were given back as the weight of the dollar driven mostly by anticipation of the US Federal Reserve cutting interest rates. The rate cut of 0.5pc has pushed the AUD further to an 18-month high.
Forward market buyers and sellers were looking to gain some certainty by hedging positions. Bids and offers were generally scattered across the nearby months out to December with most looking flat to market for cover. Only trades occurred in 18.5 microns with October and November trading at 1400 cents and 1405 cents respectively. December remains bid flat to cash, with 19 micron at 1350 cents and 21 micron at 1260 cents.
Latter months continue to be well bid, but restricted to the fourth quarter 2025 and into 2026, with 19 micron bid in November and December 2025 at 1450 cents (cash 1357 cents). January 2026 is showing an even higher premium with 19 micron bid at 1500 cents (143 cents over cash) and 19.5 micron at 1450 cents (131 cents over cash).
Next week’s 34,000 bales are unlikely to provide any downward pressure. Traders will continue to look for opportunities to balance their books providing intermittent openings for growers to hedge.
The main drivers will continue to come from the currency movements, tepid demand, and the general malaise of the markets. Ups and downs will continue punctuated by the jerks of politics.
Trade summary
October 2024 19.5 micron 1400 cents 10 tonnes
November 2024 19.5 micron 1405 cents 10 tonnes
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