Stairway to heaven?

Wool Market Update 14th June 2024

“You don’t have to see the whole staircase, just take the first step” – Martin Luther King Jr

Another step forward for the spot market as all micron groups posted solid gains between 1 and 2 per cent. 32,000 bales were offered with more than 96% sold. Prices for the key micron groups of 19.0 and 21.0 are now approaching the top for their ranges for this calendar year.

Forwards remained bid flat to cash for the prompt window and a slight discount for the early spring. Growers have begun their first tentative steps setting levels for seasons start and out to the end of the year at a one to two percent premiums to cash. Buyers continue to stay justifiably cautious with processors stuck in their “just in time” purchase program. Macro-economic conditions and lack of consumer confidence still weigh on the minds of pipeline participants, but tight supply conditions could stimulate a change in attitude.

With only 28,000 bales next week we are likely to see the delicate balance of supply and demand should prices to remain solid. While currency has lingered in a narrow band any increase in demand could stimulate opportunities for growers looking to hedge into the spring and summer.

Premiums for mid 2025 to 2026 are still set at 3% indicating forward confidence but concern that medium term recovery is still a little time away.