FORWARD wool trading was light last week despite a strong finish to the spot auction market before the three-week recess.
In the last two weeks there has been a rebound in all Merino qualities of more than 5 percent.
The bounce was not unexpected, but as Winston Churchill said: “I always avoid prophesying beforehand because it is much better to prophesy after the event has already taken place.”
Prices had retracted more than 20pc since the February highs, with 19 micron falling 360 cents and 21mmicron down 290 cents. The rally has seen prices improve 84 and 139 cents respectively.
On the forward markets, trades were again light, with August trading close to cash for 19 micron and 21 micron traded at a discount of 3pc. This was likely due to tight supply of the 21 micron that saw a rise of over 10pc in the last fortnight.
So, what does that mean for the new season?
If we look at the price movements for the past decade, the picture is no clearer. Seasonality will likely counts for little. The long-term cycle trend seems to hold sway.
Considering the 19 micron prices, the possibility of continued rally will depend on the macro-economics rather than the seasonal supply variations.
This week’s trades
August 2023 19 micron 1475 cents 5 tonnes
August 2023 21 micron 1310/20 cents 15 tonnes
Total 20 tonnes
Source – Southern Aurora Markets.