Southern Aurora Markets partner Mike Avery.
“Be faithful in small things, because it is in them that your strength lies.” — Mother Teresa
The wool auction resumption after the Easter recess got off to a shaky start on Tuesday with the finer microns particularly under pressure.
On Wednesday, the market tried to find a base. A strong USD combined with a single selling centre limiting supply saw a rally in prices Thursday.
The forward market took its lead from the auctions. Poor sentiment early in the week triggered further hedging out in 2025, with the long-standing bids for 19 micron trading at 1470 cents (80 cents over cash) for April, May, and July.
The bright start to the Melbourne auction on Thursday prompted buyers to hit the available nearby offers with 19 micron and 21 micron trading at a 37-cent and 49-cent premium respectively, over the closing cash. The market settled into the end of the week.
Bidders remain active at a more conservative 15 to 20 cent premium. Sellers, having seen the value of having seemingly conservative levels in the market, have begun to populate the offer side out to the spring.
Trading volumes remain frustratingly low but with some of the bid/offer spreads tightening participants have reasonable indications of current market sentiment. For example, June is bid at 1435 cents and offered at 1440 cents for 19 micron, hence showing a 20-cent premium to cash. Also, in June, 21 micron is bid 1325 cents and offered 1335 cents, therefore a 30-cent premium to spot.
With current spot prices historically and challengingly low it is more important than ever for the forward market to be actively participated by both buyers and sellers.
This week’s trades
May 2024 21 micron 1355 cents 5 tonnes
July 2024 19 micron 1455 cents 5 tonnes
April 2025 19 micron 1470 cents 5 tonnes
May 2025 19 micron 1470 cents 5 tonnes
July 2025 19 micron 1470 cents 5 tonnes
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