IT was a busy and challenging week for all participants across the wool pipeline last week.

Growers received excellent returns for their wool as exporters and processors pushed prices for Merino types more than 100 cents over the Christmas close. The forward markets traded briskly as exporters looked to cover early autumn sales and build stocks into the new season.

Supply concerns and solid demand are the short-term drivers. Buyers will be looking to some stabilisation of prices at these new levels. Rapid price movements usually lead to demand strangulation. Pleasingly, the rise stimulated activity into the spring and next year, delivering some historically high hedging levels. This week’s sales will test the resolve of buyers and sellers. We expect a volatile time ahead for the auction and the forwards.

Trade summary

Jan   21 micron                                   1455 cents 2 tonnes

Feb   19 micron                                  1635 cents 2.5 tonnes

Feb   21 micron                                  1425/45/55 cents 7 tonnes

March   18.5 micron                         1720 cents 2.5 tonnes

March   19 micron                            1635/1660 cents 5 tonnes

March   21 micron                            1425/1450 cents 21 tonnes

April   21 micron                                1420/1442 cents 24.5 tonnes

May   21 micron                                1405/1440 cents 43 tonnes

June   21 micron                                1419/1420 cents 10 tonnes

Sept   19 micron                                1580 cents 2.5 tonnes

Nov   21 micron                                 1350 cents 7 tonnes

Jan 2018   19 micron                        1575 cents 5 tonnes

Mar 2018 19 micron                         1550 cents 2.5 tonnes

Total 135.5 tonnes.

Source: Southern Aurora Wool.