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.