THERE was better participation in the forward wool market this week as the physical auctions had another topsy turvy week.

Forward market activity was restricted to the 21 micron index, with maturities spread from August to December. A total of 77 tonnes or about 620 bales was traded, with prices ranging from 2165 cents in August to 2050 cents in December.

These levels represent fair value considering the 21 micron index traded down to 2133 cents last week. Although below the peak spring hedging levels achieved in February this year which ranged between 2100-2150 cents, a price level of 2050 is in the 75 percentile band for the last four years.

Volatility will likely be our bed partner for the remainder of the season. Currently running at over 14 percent, the balance of low supply and sporadic demand will see marked fluctuations in prices over the coming weeks. This should give growers opportunities to set attractive forward levels.

To date less than 1pc of the volume anticipated to go through auction in the July to December period has been hedged forward. In the current high risk environment, it is an issue for the wellbeing of the whole pipeline to address.

Projected forward trading levels for next week

Month                                                19 micron                           21 micron                           28 micron

June                                                    2180 cents                         2160 cents                         1100 cents

July                                                     2180 cents                         2160 cents                         1100 cents

August/September                          2180 cents                         2160 cents                         1100 cents

October/December                         2100 cents                         2080 cents                         1000 cents

January/June 2020                          2050 cents                         1950 cents                            930 cents

July/December 2020                       2000 cents                         1900 cents                            850 cents

Trade summary

21 micron August                            2080/2165 cents                20 tonnes

21 micron October                          2070/2075 cents                21 tonnes

21 micron November                      2050 cents                          22 tonnes

21 micron December                      2050 cents                          14 tonnes

Total 77 tonnes