Forward wool trading support prompts better auction market

Michael Avery, Southern Aurora Markets partner, April 9, 2020

FORWARD wool markets found support early in the week, pre-empting a much better tone to the auction market Tuesday and a strong close into the Easter weekend.

Interest returned to the prompt window, with buyers looking to hedge sales.

Growers took the opportunity to take some risk cover out to the end of the season, accepting discounts of 20-40 cents to secure volume, considering the average daily movement of 30 cents in the last month.

Following on from last week, activity continued for 19 microns in the spring and summer. Trading, that last week found a level down to 1370 cents, lifted throughout the week to close at 1410 cents.

With an additional single day sale rostered in the Easter recess next week, we might see a continuation of the current rally. With the autumn break well underway in a number districts, growers should consider setting hedge targets to take advantage of any rallies. The only constant this wool season has been the constant volatility and inherent risk.

Anticipated trading levels

19 micron                           21 micron

April/May/June                                               1480 cents                         1440 cents

July/August/Sept                                             1430 cents                         1390 cents

Oct/Nov/Dec                                                     1420 cents                         1380 cents

Jan/Feb/March                                                1410 cents                         1360 cents

Trade summary

May 19 micron                                 1445/1460 cents                             15 tonnes

May 21 micron                                 1415/1440 cents                             15 tonnes

June 21 micron                                 1415/1445 cents                             20 tonnes

November 19 micron                      1385 cents                                          5 tonnes

December 19 micron                      1410 cents                                       10 tonnes

January 2021 19 micron                 1390 cents                                           2.5 tonnes

February 2021 19 micron               1380 cents                                           2.5 tonnes

Total 75 tonnes



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