Wool Market Reports

Wool growers miss first hedging opportunity of 2024

Terry Sim, January 12, 2024

Southern Aurora Markets partner Mike Avery.

“What is the difference between an obstacle and an opportunity? Our attitude towards it. Every opportunity has a difficulty, and every difficulty has an opportunity”. J Sidlow Baxter

 

THE return of wool auctions after the Christmas recess began with optimism.

Over the break, superfine and crossbreds traded at cash in limited volume.

Forward bidding indicated a steady if not solid start with all indices  — 17 micron through to 30 micron — bid flat to close out to June. This unfortunately couldn’t draw selling levels out with growers wanting to see the open.

The reality didn’t quite match the optimism, but with the Melbourne market regaining the losses of the final day pre-Christmas slip, it was enough for the bidders to lift levels in an endeavour to attract the attention of sellers.

Sellers were again not prepared to enter the market even with the subsequent easing of prices Wednesday. With Thursday’s auction market drifting lower again, the resolve of buyers was finally tested and bid levels retreated.

Buyers have set the new support levels. Demand signals remain challenging ahead of next week’s 55,000 plus bales.

A combination of timing and weather shocks across Australia’s wool production area meant growers missed the first hedging opportunity of the New Year. With the Chinese New Year approaching, the prospect for hedging will likely appear again over the next few weeks as we work through the larger auction volumes.

Current bid levels out to June 2024

17 micron – 1880 cents

18 micron – 1630 cents

19 micron – 1445 cents

20 micron – 1330 cents

21 micron – 1300 cents

28 micron – 345 cents

30 micron – 320 cents.

Source – Southern Aurora Markets.

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