Renewed auction demand rejuvenates forward wool trading

Michael Avery, Southern Aurora Markets partner, February 10, 2023

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


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 -