Wool price volatility affecting forward market activity

Michael Avery, Southern Aurora Wool, April 28, 2017

THE volatile nature of the market played out in the physical and forward sectors this week on the return from the Easter recess.

The weight of wool on the market saw prices retract on opening, but steady by the week’s end. The forward markets remained firm with support levels into the end of the season unchanged.

The 19.0 micron index created new highs, trading at 1870 and 1890 cents. Spring levels ignored the fall in the spot market and traded above the most recent support in both 19 and 21 micron indexes.

The key 1400 level was reached for September and October for 21 micron wool, but buyers were hesitant due to the volatile nature of the market. Implied volatility is running at over 23 percent — the highest for nine months — and has more than doubled since January. This could bring opportunities in the forward markets as exporters look to keep positions tight in this volatile environment.

Trade summary

May                        19 micron             1890 cents                     3 tonnes

June                       19 micron             1870 cents                     3 tonnes

Aug                         19 micron             1780/90 cents            13 tonnes

Aug                         21 micron             1415 cents                     4 tonnes

Sept                        19 micron             1755/65 cents             12 tonnes

Sept                        21 micron             1390/1400 cents       7.5 tonnes

Oct                          21 micron             1400 cents                 8.5 tonnes

Total     51 tonnes


Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Sheep Central's news headlines emailed to you -