Wool Forward Market Report 3 March 2023
A relatively uneventful week on both the spot auction and forward markets. The spot market was generally positive but patchy. Generally speaking, finer wools, 17.0 to 19.0, performed a little better than the medium merinos and the crossbreds were again becalmed. This translated to an EMI 4 cents (0.3%) gain for the week in AUD terms but a loss of 8 cents (0.9%) in USD. Logistic headaches, resulting in cycle time blowouts to funding and cashflow issues, remain the bugbear for the pipeline. This is hampering potential price momentum build.
Compared to other agricultural commodities wool is holding well in a week that was quoted as “more momentous momentum moments” by analysts.
The forward market was again disappointing by way of volume with only 30 tons traded. Activity continues to be focused on the nearby export purchase window of March and April. Trades went through flat to spot auction with both buyer and sellers looking to lighten positions and gain a little margin certainty.
Next week delivers another 50,000 bale auction series. Volumes will likely fall back as we head to the Easter recess in four weeks. We expect forwards to be again bid at or around cash for autumn maturities providing growers with hedging opportunities.
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. Picture supplied by @krisifrost.