WOOL forward markets seemed to find a base into the spring as the spot auction sector continued to taper downwards this week.

Growers hedged 150 tonnes of wool on the forward markets this week, with the main activity into the spring and early summer.

Prices paid by exporters and processors for 19 micron ranged from 1435c/kg for September early in the week and stabilising around 1400 cents by week’s end. The pattern was similar for 21 microns, with September levels peaking at 1390 cents, before levelling at 1370 cents.

The uptick in volume has been attributed to more growers looking to have some certainty of return going into the spring and New Year. The improved climate outlook, coupled with the faltering  financial landscape has seen growers placing a higher value locking in certainty on part of the clip.

Processors are seeing the same risk aversion strategy as they grapple with finding fair value in a wholesale and retail sector that is very much in uncharted waters.

Where to from here? Probably more of the same. Spot prices likely to meander unless there is some change in the trajectory of the current health issues. Sellers will likely outnumber buyers in the short term as the steady build of stocks will be considered a barrier to a concerted upward move. Growers should still find opportunities as processors look to keep balance.

One thing that is certain is that the road is unclear and the only way forward is to plough on.

Anticipated trading levels

19 micron                           21 micron

May/June                                                         1440 cents                         1400 cents

July/Aug/Sept                                                  1410 cents                         1370 cents

Oct/Nov/Dec                                                   1400 cents                         1360 cents

Jan/Feb/March                                               1390 cents                         1350 cents

Trade summary

July 19 micron                                                 1445 cents                         10 tonnes

August 19 micron                                           1400/1445 cents               13 tonnes

August 21 micron                                           1370 cents                            5 tonnes

September 19 micron                                    1435 cents                         10 tonnes

September 21 micron                                    1370/1390 cents               19 tonnes

October 19 micron                                         1390/1425 cents               48 tonnes

Nov 19 micron                                                1415 cents                            5 tonnes

Dec 18 micron                                                 1470 cents                         10 tonnes

Dec 21 micron                                                 1365 cents                           5 tonnes

Jan 2021 21 micron                                        1365 cents                           5 tonnes

Total 150 tonnes