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