THE physical market’s continued positive direction, particularly on the fine Merino and crossbred wools, was reflected in the forward prices paid this week.
Most activity occurred in the new season. Volume was split fairly evenly between the 19 and 21 micron contracts. The key 19 micron contract traded in August at 1720 cents, in October at 1695, November at 1685 cents and into January 2018 at 1675 cents and in June at 1650 cents.
Volumes remain steady, with over 100 tonnes traded, around 2 percent of the spot offering. With prices for most micron groups in uncharted territory exporters, growers and industry analysts are divided on the timing and depth of any retracement.
The uncertainty is reflected in the trading levels as we see a fairly linear discounts out to the early new year, where prices tend to flatten. This pattern is likely to continue as both buyer and seller look to find a balance between risk and certainty when searching for fair value.
Short term we see trading levels to hold around the following levels.
March/April 19 micron 1840-1860 cents 21 micron 1440-1470 cents
May/June 19 micron 1750-1780 cents 21 micron 1420-1450 cents
August/Sept 19 micron 1710-1730 cents 21 micron 1380-1390 cents
Oct /Dec 19 micron 1680-1700 cents 21 micron 1350-1370 cents
Trade summary
April 19 micron 1840 cents 5 tonnes
May 21 micron 1460/1465 cents 5 tonnes
June 18.5 micron 1870 cents 3 tonnes
June 19 micron 1750/1760 cents 17 tonnes
June 19 micron Put Option strike 1730 cents 30 cent premium 2.5 tonnes
July 19 micron 1725 cents 6 tonnes
July 21 micron 1439/1450 cents 24.5 tonnes
Aug 19 micron 1715/1720 cents 10 tonnes
September 19 micron 1670 cents 5 tonnes
September 21 micron 1380 cents 22 tonnes
Oct 19 micron 1695 cents 2 tonnes
Nov 19 micron 1685 cents 5 tonnes
Nov 21 micron 1375 cents 7 tonnes
Jan 2018 19 micron 1675 cents 2.5 tonnes
June 2018 19 micron 1650 cents 5 tonnes
Total 121.5 tonnes
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