FORWARD wool trading was light but positive last week as it stabilised with the spot auction market.

This was in line with other major commodities as trader’s confidence grew with the thinking that the coronavirus may not have the large economic impact as first feared.

Trading is still light on the forwards but levels creep up with the 21 micron index trading above 1800 cents.

It is hoped that this will bring out further action from sellers as this level represents the 85th percentile of prices for the last decade.

Valuing certainty of a percentage of production should be paramount in this volatile landscape. On more than 25 percent of trading days last year, the price of 21 micron wool was more up or down more than 30 cents.

This year with only one month under our belt we have had four such occasions (1 up and 3 down).

The best defence against this sawtooth market is better liquidity in the forwards. This requires more consistent involvement right along the pipeline giving buyers and sellers improved market signals and hedging opportunities.

Anticipated trading levels this week

19 micron            21 micron

January/February                                          1840 cents          1800 cents

March/April                                                     1840 cents          1800 cents

May/June                                                         1815 cents          1775 cents

Trading last week

21 micron March                             1790/1805 cents                10 tonnes

21 micron April                                 1780 cents                             5 tonnes

20 micron May                                 1785 cents                              2 tonnes

21 micron May                                 1770 cents                               5 tonnes

Total 22 tonnes