“The best wisdom comes from the hardest struggles” – Xavier Rudd
FORWARD wool trading bounced back in a positive week for the spot auction market, in a season that has largely struggled against the tide of poor demand, lack of confidence and increasing global tension.
All Merino micron groups have suffered losses of between 6-9 percent since the start of the season, with the superfines most effected.
This week all qualities gained ground with the 18-19.5 micron wools gaining around 2pc.
The forwards, that have endured low turnover and interest throughout the decline, bounced back with solid bidding across the board.
Growers for the most part have shunned the forwards during the downturn. Volumes have remained under 1pc of auction turnover for the last six months as growers were reluctant to accept bids at discounts to the spot market.
Forward bids this week have lifted to be level with cash out to the end of November. The only trades this week occurred in 21 micron, that traded early, mid, and late November at 1325 cents – a 2pc premium to cash.
There has been no follow up offering to test the resolve of buyers. This seems counter intuitive considering the current global uncertainty and the mixed bag that seasonally generally delivers this time of year.
In the last decade, the market has fallen throughout November four times, been relatively unchanged four times and risen twice. Reluctance is understandable when looking at the long term charts which have prices in the 30 to 40 percentile range on particularly the finer wools. Still, some nearby insurance could be handy.
Hopefully, we will see buying levels remain strong next week and present opportunities for buyers and sellers to hedge some risk.
This week’s trades
November 2023 21 micron 1325 cents 27 tonnes
Total 27 tonnes