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