Confusing or Confucius?

Wool Market Update 12th July 2024

“A man who does not plan long ahead will find trouble at his door.” – Confucius

The trials and tribulations of the spot auction continued this week. Most qualities suffered a further one and a half to two percent decline in prices with fine crossbreds bucking the trend by holding firm. Demand remains muted at best with prompt indent orders and currency movement governing the short-term direction of the market. Passed in rates continue to hoover at ten percent as growers reluctantly accept the lower prices.

The early month bidding on the forward market again wilted with the weight of the lacklustre spot. Bidding through to December started flat to last week’s close but withdrew as the strong Aussie dollar and cautious auction purchasing weighed on sentiment. The only trade this week was for the spring of 2025 with 19.0 trading for September at 1500 (a 10% premium to closing cash of 1363). Processors still have restricted hedge demand at these levels from October 2025 onwards.

It is hard to see how much will change prior to the recess in two weeks’ time. Hopefully we will see some bid levels in the medium-term forwards to give growers some signals and opportunities. There is an old saying “There is a time to plan, a time to act, and a time to rest; it is wise to know which is which.”

Maybe now is the time to rest. The upcoming recess a time to start putting a hedge plan in place and optimistically the new season will deliver a time to act.