An optimistic trend

Wool Market Update 24th November

“A pessimist sees the difficulty in every opportunity. An optimist sees the opportunity in every difficulty” – Winston Churchill

The physical market continued its rally despite the strong AUD. Most merino fleece qualities gained 2 and 3% during the week. The Crossbreds and cardings remained relatively flat.

The forward market fared slightly better with trading restricted to the 19.0 and 21.0 categories. Grower patience was rewarded with forwards executed flat to cash for late November and December at levels not seen since the start of the season. 19.0 traded to 1455 and 21.0 to 1355. In general volumes on both the bid and the offer continue to disappoint. At least on the bid side levels are there particularly in the prompt window and out into the first quarter of 2024. Better depth is required to give confidence to these levels but at this point bidding is relatively flat to the newly established auction prices. Little indication is currently coming from the sell side.

With three weeks to run the Christmas recess time will tell if the rally can be sustained. In general, the market finds it hard to hold a rally passed the 5 solid sessions we have experienced over the last three weeks. The pending recess may play a part sustaining the rally but only if demand can be maintain. If so, we may see new year hedging levels that growers could find acceptable to offset some risk.