Wool forward market quiet despite higher bids into the New Year

Michael Avery, Southern Aurora Markets partner, December 14, 2018

IT was a quiet week on the forward wool market as buyers lifted levels into the New Year, but were unable to attract too much interest from the growers.

Bidding remains slightly under spot levels, reflecting the difficulty of buyers to attract significant offshore interest ahead of the Christmas recess. The exception is on the crossbreds, where bidding on the 28 micron group is showing a 2 percent premium to spot levels out to June 2019.

The Merinos are bid under cash, but this still represents the 75 to 85 percentile for the last two years. The 19 micron bidding is at 2200 cents in January out to 2155 cents in June, with 21 micron at 2110 cents in January out to 2050 cents in June.

We expect pre-Christmas activity to be light, but with opportunities there for growers to hedge at historically high levels.

Trade summary

19 micron May                                 2110/2155 cents               10 tonnes

19 micron June                                 2125 cents                             5 tonnes

20 micron Feb                                  2155 cents                             5 tonnes

28 micron Feb                                     860 cents                             2.5 tonnes

Total 20.5 tonnes

Projected forward trading levels for next week

Month                                                19.0 micron c/kg              21 micron c/kg

Jan                                                      2200                                    2110

Feb                                                      2180                                    2090

March                                                2160                                    2090

Apr/May                                            2155                                    2060

June/July                                           2155                                    2050

Aug/Sept                                           2000                                    1930

Oct/Dec                                             1950                                    1900


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