Forward wool trading limited as auctions struggle

Michael Avery, Southern Aurora Markets partner, November 11, 2022

Southern Aurora Markets partner Mike Avery.

FORWARD wool trading was limited in another lacklustre week at auctions, with most qualities continuing to lose ground.

The market remains tentative, with the macro drivers still unable to give it direction.

Most commodity markets are reacting to the short-term influences of currency movements, wavering sentiment, and rumour.

The lack of accurate demand signals from wool’s major customer, China, continues to undermine confidence.

Ever increasing pressures of the conflict in Ukraine and snowballing energy cost is limiting the keenness of European processors.

The forward markets are reacting to the meagre firm offer sales that seem to be limited to the prompt shipping window. Trading was limited to the November and December. Both 19 micron and 21 micron traded around 10 cents under auction closing levels for November and 20 cents under those for December.

The New Year bid/offer spreads remain wide with light volumes offered up on both sides, highlighting the uncertainty around expectations further forward.

There is not a lot of change in the charts and little that is not already evident. All qualities are easing and the finer the more affected with the basis (difference between micron prices) tightening every day.

We anticipate more of the same next week with more hope than expectation that the market will find support again on the medium wools as they approach the lows, they bounced off one month ago.

This week’s trades

November 19 micron                                                    1515 cents                          5 tonnes

November 21 micron                                                    1275 cents                         10 tonnes

December 19 micron                                                    1505 cents                            2.5 tonnes

December 21 micron                                                    1265 cents                            2.5 tonnes

Total 20 tonnes


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