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
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