Faith in the small things

Wool Market Update 12th April 2024

“Be faithful in small things, because it is in them that your strength lies.” — Mother Teresa

The auction resumption, after the Easter recess, got off to a shaky start on Tuesday with the finer microns particularly under pressure. Wednesday saw the market try to find a base. A strong USD combined with a single selling centre limiting supply saw a rally in prices Thursday.

The forward market took it’s lead from auction. Poor sentiment early in the week triggered further hedging out in 2025 with the long-standing bids for 19.0-micron trading at 1470 (80 over cash) for April, May, and July.

Thursdays bright start at Melbourne’s auction prompted buyers to hit the available nearby offers with 19.0 and 21.0 trading 37 and 49 cents premium respectively over the closing cash. The market settled into the end of the week. Bidders remains active at a more conservative 15 to 20 cents premium. Sellers, having seen the value of having seemingly conservative levels in the market, have begun to populate the offer side out to the spring.

Trading volumes remain frustratingly low but with some of the bid/offer spreads tightening participants have reasonable indications of current market sentiment. For example, June is bid at 1435 and offered at 1440 for 19.0 micron hence showing a 20-cent premium to cash. Also, in June 21.0 micron is bid 1325 and offered 1335 therefore a 30-cent premium to spot.

With current spot prices historically and challengingly low it is more important than ever for the forward market to be actively participated by both buyers and sellers.