IT was another tough week for the spot auction and forward wool markets, but the market is expected to find a base next week.
The spot auction market had been holding on the lower range of the trading channel it had formed after the initial COVID-driven impacts.
Auction prices have been somewhat sheltered by the weakening Australian dollar and strong US dollar, but eventually fell victim to the poor demand and increasing logistic and manufacturing costs.
The chart below illustrates the 19 micron price breaking below the three-year average and its support levels of the last eighteen months.
The forward price ranges for 2022/23 maturities are depicted by the red vertical lines. Since January, forward prices for 19 micron have traded in a range from 1610 cents to 1770 cents before the break-out this week. November traded at 1550 cents before falling to 1500 cents.
Much of the forward trading for the week was in the New Year, with growers looking to get some cover. Maturities were spread from March to September in 2023 and traded out two years forward to September 2024.
Expectations are for the market to attempt to find a base next week. Indicative forward levels for next week likely to be around the recent established levels for 19 micron at 1500 cents and for 21 micron at 1230 cents.
This week’s trades
November 17 micron 2250 cent 5 tonnes
November 18 micron 1750 cents 5 tonnes
November 19 micron 1500/50 cents 15 tonnes
November 21 micron 1230 cents 5 tonnes
March 2023 19 micron 1550 cents 10 tonnes
April 2023 19 micron 1550 cents 5 tonnes
September 2023 19 micron 1550 cents 15 tonnes
September2024 19 micron 1550 cents 10 tonnes
Total 70 tonnes
Source – Southern Aurora Markets.