Southern Aurora Markets partner Mike Avery.

“As a child my family’s menu consisted of two choices: take it or leave it.” ― Buddy Hackett

Meander, amble, wander — how many synonyms can we use to describe the current path that the wool auction market has taken in the first half of the season?

The last six weeks has seen the AWEX Eastern Market Indicator price benchmark move in single digits each day with a nett result of just 2 cents over those 14 selling days.

This is against a backdrop of 20 per cent less volume coming through the auction. The other constant has been the low — less than 10 percent – passed-in rate. Growers are “price takers” even at these low historical levels.

The forward markets are suffering from the absence of liquidity triggered by low volatility and nearby demand. Volumes for the season to date are running at less than 0.5% of the underlying clip.

The viability of the market is at risk. The only trade for the week was in the 19 micron contract that was executed at 1430 cents for January 2025 – a 30-cent premium to cash. The 19 micron contract remains consistently bid across the maturities. With cash at 1400 cents – November/December bid 1390 cents (-10), January/February bid 1410 cents (+10), March 1415 cents (+15), May 1410 cents (+10) and December 1450 cents (+50). Out into 2026, 19 micron is bid January and March at 1500 cents (+100 to cash).

Growers are gradually showing where they consider fair value by offering prompt (December 2024) at 1415 cents (+15).

Later into 2025, July is offered at 1485 cents and August at 1505 cents. With current prices in the lower half of historical percentiles, sellers need to populate the forward markets at levels that they believe represent fair value.

Next week is likely to deliver a similar tepid spot market with light volumes again the only potential trigger.

Source – Southern Aurora Markets.