Ray of hope sparks some forward wool market trading

Michael Avery, Southern Aurora Markets partner, June 30, 2023

Southern Aurora Markets partner Mike Avery.

A LITTLE light was provided to the spot auction this week with the rate of decline tempered by the strong US dollar.

The opening to the week was once again mediocre, but the stimulus of the USD kicked in Wednesday with the strongest market seen as we moved into the close.

This ray of hope produced some reaction on the forward markets with bidding returning to the nearby window and trades being executed at a 2 percent premium to cash.

Exporters and offshore processors took advantage of the currency kick with key micron groups approaching long-term support levels. The 19.5 micron contract traded at 1400 cents (closing cash 1360 cents) and the 21 micron contract traded at 1275 cents (closing cash 1247 cents). Spring traded flat to cash with 21 micron being executed at 1250 cents.

These currency stimuli can be short-lived and should be viewed as opportunities to gain some hedging cover. The main drivers will continue to be macro-economic outlook and consumer confidence.

With just two more sale weeks before the three-week recess, hopefully we will see enough demand inspired by gap in supply and an advantageous currency to encourage forward bidding into the Spring.

This week’s trades

July 2023 19.5 micron                                                      1400 cents                           5 tonnes

July 2023 21 micron                                                         1275 cents                          10 tonnes

September 2023 21 micron                                             1250 cents                         10 tonnes

Total 25 tonnes

Source – Southern Aurora Markets.


Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Sheep Central's news headlines emailed to you -