All or nothing?

“Life has many ways of testing a persons will, either by having nothing happening at all or by happening at all or by everything happening at once” – Paulo Coelho

In essence not a lot happening in the markets. A positive week looking at the quotes from the spot auction with finer microns moving up 2% and broader 1%. Crossbreds finished a little weaker. The market was well supported helped along by a strong USD, good quality fine wool selection, and tight supply. Passed in rate were once again very low (3.8%Wednesday) reflecting growers’ willingness to accept these slightly improved levels.

The positive move in auction sparked modest movement on the forwards with 20 and 21 microns trading in April and May 20 to 35 cents over closing spot. Trade in the forwards remains very light. Bidding continues to be set for 2025 at a fair premium reflecting the cost of carry (interest plus storage). The lack of offering throughout 2025 is failing to test the metal of the buyers who remain content to react to any modest demand signals.

As we move into the final three weeks of sales prior to the Christmas recess the meandering pattern is likely to continue with currency, quality and supply dominating the direction.

The bigger economic picture remains just as unclear as it has for the last eighteen months. Limited cease fire in the Middle East matched by escalation in Ukraine. Consumer confidence still low. Trump trading tweets on tariffs causing tension. How this will play out is anyone’s guess but likely to kick any break upwards from the current long-term trend down the road a bit. Strategy should still be to grab potential hedge opportunities on short term rallies

This report is provided by Southern Aurora Markets, please subscribe to their service or contact them for a chat about any price risk management needs in fibre markets.