Its a challenge

Wool Market Update 19th January 2024

Another challenging week for the spot market. There was one major conclusion from this week’s sales. With passed in rates under ten percent all week growers, in general, are committed sellers. Overall, the loses occurred mainly on the first day. Fine wools were the most adversely affected. Crossbreds bucked the trend finishing two percent up for the week.

The forward market followed another path. With demand signals muted and global risk still high buyers had reduced forward levels last week. That sentiment bought out some selling prior to auction with 19.0 trading at 1455 and 19.5 at 1392. The spot fell on the first day towards those levels but after a short pause bidding returned. Quantities remain limited expressing the uncertainty in the market. Buyers are looking to get some cover and share the risk but not yet committed to building a long position. Widespread opinion is this will continue in the short term. Any break in this pattern will require a shift in demand and an improvement in the total risk landscape. Forward sellers remain very thin on the ground making it challenging for exporters