Southern Aurora Markets partner Mike Avery.

AUSTRALIA’S spot wool auction market and forward trading levels continued to disappoint this week.

Most qualities fell around 4 percent at acution, in what was probably the most significant one-week fall since the Spring of 2020 that occurred during a period of high volatility following the COVID disruption.

The forward market tracked the same way as the auctions, with trades across a wide range as the week progressed.

The 19 micron contract, having traded as high as 1660 cents a fortnight ago for a year forward, was executed at 1525 cents in the prompt window. Longer maturities (August and September 2024) traded at 1600 cents early in the week, but buying interest dried up as the spot auction fell to close near medium-term support levels.

Focus on the forward market is now on the nearby with traders looking to cover risk at or near those support levels on the finer wools, but still seeing further downside risk on the medium wools.

Just where we go from here is anyone’s guess. The positive rhetoric that emanated from the recent industry conference in Japan has yet to translate into significant orders. Hopefully, that will appear over the next few weeks and provide some hedging opportunities for both buyers and sellers.

This week’s trades

June 19 micron                                                1525/1570 cents                             15 tonnes

June 21 micron                                                1335/1350 cents                             15 tonnes

August 24 19 micron                                      1600 cents                                          5 tonnes

September 24 19 micron                               1600 cents                                          5 tonnes

Total 40 tonnes

Source – Southern Aurora Markets.