Southern Aurora Markets partner Mike Avery.
“Life has many ways of testing a person’s will, either by having nothing happen at all or by having everything happen all at once.” – Paulo Coelho.
IN essence, not a lot is happening in the wool markets, although it was a positive week looking at the quotes from the spot auctions.
Finer microns moved up 2 percent this week and broader 1pc. Crossbreds finished a little weaker.
The market was well-supported helped along by a strong USD, good quality fine wool selection, and tight supply. The passed-in rate was once again very low — 5.5pc for the week — reflecting growers’ willingness to accept these slightly improved levels.
The positive move in the auction market sparked modest movement on the forwards, with the 20 and 21 micron contracts trading in April and May 20-35 cents over closing spot.
Trade in the forwards remains very light. Bidding continues to be set for 2025 at a fair premium reflecting the cost of carry — interest plus storage. The lack of offering throughout 2025 is failing to test the mettle of the buyers, who remain content to react to any modest demand signals.
As we move into the final three weeks of sales prior to the Christmas recess, the meandering pattern is likely to continue with currency, quality and supply dominating the direction.
The bigger economic picture remains just as unclear as it has for the last eighteen months, with the limited ceasefire in the Middle East matched by the escalation in Ukraine. Consumer confidence is still low. Trump trading tweets on tariffs is causing tension.
How this will play out is anyone’s guess, but likely to kick any break upwards from the current long-term trend down the road a bit. The strategy should still be to grab potential hedge opportunities on short-term rallies.
Trades this week
April 2025 21 micron 1355 cents 10 tonnes
May 2025 20 micron 1385 cents 10 tonnes
Source – Southern Aurora Markets.
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