Wool Market Reports

Limited lift in forward wool trading as auction prices improve

Michael Avery, Southern Aurora Markets partner, June 7, 2024

Southern Aurora Markets partner Mike Avery.

“The monotony and solitude of a quiet life stimulates the creative mind” – Albert Einstein

 

IT was a solid week for wool prices at auctions across Australia and there was a limited lift in forward trading.

All microns showed improvements of between 1 and 2 percent for the week, with the modest supply (27,000 bales) matching the limited demand.

Indent orders continue to dominate activity, leading to the market being range-bound and influenced by foreign exchange rates, particularly for the US dollar.

The passed-in rates remained low at 5pc, with growers accepting the unexceptional prices of the spot market.

The forward market had a limited lift reflecting the “just in time” nature of export market at present.

Strong forward indications had been restricted to the latter part of 2025 into 2026 and 2027, where premiums of around 100 cents to spot are offered.

This week’s trades focused on the early part of the new season out to December 2024. The 19 micron contract traded December at 1460 cents — a 40-cent premium to cash — and the 19.5 micron contract traded September at 1415 cents — a 30-cent premium. These trades triggered grower interest that saw limited offers posted at similar premium levels for 19 and 19.5 micron from July to December.

These offers have yet to generate further action from the exports and processors, indicating the concerns around medium-term consumer confidence and the geopolitical situation. Notwithstanding the restrained volume, the trading did highlight the importance of buyers and sellers having levels in the market to give all participants in the pipeline, if not certainty, an indication of future direction.

With supply again limited to around 33,000 bales next week the market is likely to remain range bound driven again by the indents and currency vagaries.

This week’s trades

September 19.5 micron                                                 1415 cents                          10 tonnes

December 19 micron                                                      1460 cents                             5 tonnes

Total 15 tonnes

Source – Southern Aurora Markets.

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