IT was a relatively uneventful week on both the spot and forward wool markets, with auction values generally positive, but patchy.
Generally speaking, finer wools, 17-19 micron, performed a little better than the medium Merinos, and the crossbreds were again becalmed.
This translated to a gain in the AWEX Easter Market Indicator of 4 cents (0.3 percent) for the week in AUD terms, but a loss of 8 cents (0.9pc) in USD terms.
Logistics headaches, resulting in cycle time blowouts to funding and cash flow issues, remain the bugbear for the pipeline. This is hampering potential price momentum build.
Compared to other agricultural commodities, wool is holding well in a week that was quoted as “more momentous momentum moments” by analysts.
The forward market was again disappointing by way of volume, with only 30 tons traded. Activity continues to be focused on the nearby export purchase window of March and April. Trades went through flat to spot auction with buyer and sellers looking to lighten positions and gain a little margin certainty.
Next week delivers another 50,000 bale auction series. Volumes will likely fall back as we head to the Easter recess in four weeks. We expect forwards to be again bid at or around cash for Autumn maturities providing growers with hedging opportunities.
This week’s trades
March 19 micron 1710 cents 15 tonnes
March 21 micron 1465 cents 10 tonnes
April 19 micron 1710 cents 5 tonnes
Total 30 tonnes
Source – Southern Aurora Markets.