Steady is good

Another steady week for the spot auction. Little change in the micron price guides although better quality wools continued to attract increasing premiums. Offshore news remains subdued. Continued back and forth on implementation of tariffs leaving the pipeline cautious.

Forward markets maintain their bidding flat to a small premium into the spring and early summer.  Sellers remain by and large absent in the new season with the limited offers 60 to 80 cents above spot leaving it difficult to gauge accurate forward levels. Open positions on forwards are currently less than a third of the average of the last 5 years indicating most growers are unhedged which is somewhat surprising in this unpredictable environment. Current production stresses across much of the eastern seaboard is complicating many of potential risk strategies. From an outright price view lack of hedging in the finer wools is more understandable 18.0 is sitting well below its 5-year average and 19.0 on its 5-year average. The medium wools (21 microns) are more than 100 cents above their 5-year average.

Auction volumes continue to remain tight and short of another about face in the tariff roundabout subdued demand will keep prices steady.

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