Southern Aurora Markets partner Mike Avery.
A STRONG week for the auction market was anticipated with offer boards and the forward markets active.
The auction delivered, with prices rising over 50 cents for most merino indices, but that momentum was quickly lost.
Wednesday’s sales held firm, albeit a little mixed, but Thursday indicated that the follow through from offshore was yet to appear, with the most qualities returning to the newly established levels of Tuesday.
The overall result was positive, with forward trading across most months from the prompt window out to January 2024. The 19 micron indicator traded at 1705 cents for this season at the start of the week, before confidence drove prices up to 1725 cents for July maturity.
The new season showed the same trend, with December trading at 1670 cents before pushing to the 1700 level. The size of the rise hampered trading as buyers and sellers struggled to establish a new fair value level.
The forward market is likely to stay inverted, with most buying pressure to continue to be found in the early months. Hopefully the new spot levels will result in adequate hedging opportunities for growers into next Spring and the New Year. Resistance levels of 1700 cents for 19 micron and 1400 cents for 21 cents appear to be broken for the moment and this may stimulate further activity.
Traded this week
February 21 micron 1430 cents 5 tonnes
March 19 micron 1705 cents 5 tonnes
March 21 micron 1465 cents 5 tonnes
July 19 micron 1725 cents 7 tonnes
August 18 micron 2005 cents 10 tonnes
September 19 micron 1700 cents 5 tonnes
September 21 micron 1430 cents 10 tonnes
December 19 micron 1670 cents 10 tonnes
January 2024 19 micron 1700 cents 5 tonnes
Total 62 tonnes
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