History repeats

Wool Market Update 16th February 2024

“History repeats itself, but in such cunning disguise that we never detect the resemblance until the damage is done” – Sydney J. Harris

The spot and forward markets were both on repeat. The physical auction opened Tuesday with significant falls in the superfine wools, weakness in the fine wools and medium merinos holding their own. Crossbreds remain firm near the top of their narrow trading range that has held since November. Valentine’s Day Wednesday did deliver a little love to the auction market with 17.5, 19, 20 and 30-micron price guides all posting gains. The Eastern Market Indicator (EMI) rose 1 cent, the first positive result in 12 trading sessions. Not a lot to get excited about but with the key Asian markets still celebrating Lunar New Year demand was limited. Not surprisingly the positive market continued Thursday with Melbourne the only centre selling. The EMI rose 1 cent again.

The forwards once again traded in light volumes. 15 tons traded Monday in March and April for 21.0 at 1320 which represented cash. That was that for the week. Sellers failed to follow through with any further volume, so buyers retreated waiting for direction from the auction room. With that direction negative again it was a little surprising to see traders setting levels at par to cash, albeit in limited volumes and selected micron. Bids are currently placed from March to June for 18.5 – 1475, 19.0 – 1410, 19.5 – 1355 and 20.0 – 1330. Crossbreds are bid 28.0 at 360 and 30.0 at 340.

Hopefully we will continue to find a base here but the headwinds of poor demand signals, the challenging global economic conditions and unrest continue to impact supply chains and confidence.