Wool Market Reports

Light wool forwarding trading as volatility returns

Michael Avery, Southern Aurora Markets partner January 31, 2020

WOOL market volatility that seemed to abate last week returned with a vengeance and forward trading was light.

Concerned with the fall-out from the coronavirus outbreak and anticipated closing of the Chinese mills for an extended New Year period, the spot auction fell significantly on Wednesday only to partial recover Thursday.

The forward market has been stagnant for weeks and traded lightly again, with buyers looking to find a base and sellers trying to offload some risk.

March traded 21 micron on Tuesday at 1760 cents, then 19 micron in March on Thursday at 1800 cents and 1825 cents, as the market rallied.

With volatility still high, growers should set target into the autumn and look to execute hedges on the rallies.

Anticipated trading levels next week

19 micron                           21 micron

January/February                             1820 cents                         1770 cents

March/April                                        1820 cents                         1770 cents

May/June                                            1790 cents                         1740 cents

Trading this week

19 micron March                             1800/1825 cents               7.5 tonnes  Closing cash 1793 cents

21 micron March                             1760 cents                         5 tonnes     Closing cash 1744 cents

Total 12.5 tonnes


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