WOOL forward markets have traded solid volumes for the second straight week, as growers hedged some of their clips.
Levels indicated a continued easing with 19 micron trading down to 1550 cents and 21 micron down to 1455 cents.
The predicated fall came to pass at auction Wednesday, but the forward markets held firm and traded at a premium. Strong bidding continued through Thursday and growers were able to hedge at a premium to cash out to November.
Traders dominated the spot auction to close the week with all Merino types posting gains for the first time since the July recess.
Volatility and risk remains at the forefront of all participants minds. The 36 percent retraction in price of the AWEX Eastern Market Indicator from its high of 2116c/kg, caught everyone by surprise and has caused contractual difficulty along the pipeline.
Sluggish domestic demand in China and the ongoing uncertainty of the tariff squabbles is stalling the take up of high-priced stocks. The extent and length of any recovery from this point will rely on the easing of these tensions and an improvement in global consumer confidence.
With offshore greasy stocks low, any improvement in demand will flow into the spot market. Exports wary of this will look to gain cover through the forward market. This should ensure opportunities for growers to hedge particularly into the late spring/early summer window at or around cash.
Indicative forward levels next week
19 micron 21 micron 28 micron
September 1580 cents 1500 cents 840 cents
October 1565 cents 1500 cents 840 cents
November 1550 cents 1490 cents 830 cents
December 1550 cents 1480 cents 820 cents
January/March 1530 cents 1450 cents 800 cents
April/June 1530 cents 1450 cents 770 cents
Recent trading volumes
September 19 microns 1540 cents 5 tonnes
September 21 micron 1455 cents 5 tonnes
October 19 micron 1520/1550 cents 15 tonnes
October 21 micron 1455/1500 cents 20 tonnes
October 28 micron 830 cents 5 tonnes
November 19 micron 1530/1550 cents 40 tonnes
November 21 micron 1480/1500 cents 10 tonnes
December 19 micron 1520 cents 5 tonnes
October 2020 19 micron 1550 cents 10 tonnes
Total 115 tonnes
HAVE YOUR SAY