High hopes
“With high hope for the future, no prediction is ventured.” – Abraham Lincoln
The auction market closed for the recess with a rally that summed up the year that was. – A series of ups and downs with little confidence of where to go next. Prices improved across all merino micron groups for the week with the finest again only marginally increased.
The forward market traded lightly with May 2025 trading at a forty cents premium off the back of the solid spot.
Demand remained patchy throughout the year with consumer confidence suffering under the weight of cost-of-living pressures, macro-economic stresses, political unrest, and regional hostilities. The reaction in pricing was mixed. Super Fine wools suffered the most closing 10% under their opening for the year. 18.0 micron closed minus 8%, 19.0 4% and 20.0 2%. The 21.0-micron index and the crossbreds closed the year slightly up.
The forward market traded very lightly throughout the year. The moons seemed to align to hamper trading. Volatility, which began the year relatively benign at slightly over 10% finished the year around 3 to 4% as prices oscillated in narrow bands throughout the year. Exporters saw their forward books truncated as processors remained hand to mouth with demand muted with many reverting to indent buying rather than committing to a fixed forward contract.
The trades that did occur throughout the year consistently were executed at a premium with the sporadic rallies seeing buyers look to hedge their open positions.
Auction sales commence for the New Year in the week commencing the 13th January.
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.