THE wool auction market continued to realign and confirm buyers concerns last week of a price correction.
Trades were thin on the forwards but at levels indicated last week. Off-shore demand continues, but processors are looking for further relief from the historically high levels.
Forward pricing continues to be discounted, but is still in the 85 to 90 percentile band for the last two years.
In September, 21 micron traded this week at 1640 cents. Although a significant discount to cash, it still represents almost 100 cents above the spring of last year, which was at that time a record level.
We expect the current volatility to continue as the market reacts to funding squeezes, ongoing supply concerns and intermittent demand. We anticipate forward hedge opportunities to present themselves as the market looks to find a level.
Anticipated trading levels
2018 19 micron 21 micron
March 2020 cents 1850 cents
April 2020 cents 1840 cents
May 2000 cents 1800 cents
June 1980 cents 1770 cents
July 1930 cents 1740 cents
August 1900 cents 1680 cents
September 1880 cents 1640 cents
Source: Southern Aurora Markets.