MOST wool micron groups rose 1-2 percent in another solid week at wool auctions, creating some forward trading interest.
Crossbred wool prices rose 4 percent, coming off their low base as the weaker Australian dollar continues to stimulate the market in general.
As mentioned last week, the wool market tends to be influenced but not ruled by currency movements. The chart below illustrates this.
The rapid rise in 2010/2011 occurred in the face of a 10pc increase in the A$ and the subsequent fall hardly attributed to the neutral move in the currency. This pattern prevails across the decade.
The current price situation has wools finer than 19 micron achieving four and five-year highs this week. This has bought out some nearby activity with growers happy to lock in good levels and exporters happy to hedge some short sales stimulated by uptrend.
Generally forward prices were a little better and volumes slightly improved. Buyers were looking to buy in May/June close to cash. Spring and Summer buying levels remain a little hesitant, with the 19 micron contract pegged firmly at the recent high of 1700 cents. The broader 21 micron contract attracted interest at 1325 cents — a new high for August — but buyers stubbornly resisted the opportunities offered by growers in September and October at 1330 cents and 1340 cents respectively. With the 21.0 micron contract offering historically the best value, this may likely change should the current trend continue.
Anticipated forward trading levels next week
19 MPG 21 MPG
May to July 2022 1720/1740 cents 1320/1340 cents
August to December 2022 1690/1700 cents 1310/1320 cents
January to July 2023 1690/1700 cents 1270/1300 cents
August to December 2023 1680/1700 cents 1280/1310 cent
This week’s trades
June 17 micron 2670 cents 5 tonnes
June 18 micron 2180 cents 5 tonnes
August 19 micron 1670 cents 15 tonnes
August 20 micron 1325 cents 10 tonnes
September 19 micron 1700 cents 20 tonnes
November 19.5 micron 1525 cents 5 tonnes
January 2023 19 micron 1700 cents 5 tonnes
October 2023 21 micron 1295 cents 10 tonnes
Total 75 tonnes