Southern Aurora Markets partner Mike Avery.
“Life is like a roller coaster. It has its up and downs. It’s your choice whether to scream or enjoy the ride.”
THE wool season 2023/24 finished on a downward trend as the spot auction market continued to be governed by the ‘just in time’ strategy of the offshore buyers.
Medium-term demand remains elusive leading to the spot market being driven by the domination of the indent customers and vagaries of the currencies.
Most microns suffered a decline of between 1 and 2 percent for the week, with coarse crossbreds the only exception.
The forward market again suffered from lack of liquidity. The finer microns traded early in the week as the limited number spring buyers hedged their positions finally. Buyers have been restricted by the scarcity of offers into the Spring and early Summer preventing them to build meaningful and tradeable forward book.
September 2024 traded at premiums to the spot close, with 18 micron 26 cents, 18.5 micron 17 cents and 19.5 micron 34 cents over close.
Setting hedge targets and putting a value on certainty has been beneficial to both buyer and seller but slanted heavily to the seller on the derivative side of trade in the last half of the season. About 75 per cent of trades were a positive result for sellers, with maturities from January to June.
Next week there will likely be light trading in the forwards again. Current selling levels for prompt and out to the Spring and Summer are now 50-60 cents over cash. Buyers are unable to find interest at these levels. Spring 2025 through to Spring and Summer 2026 remain bid 100 cents over spot cash.
This week’s trades
18 micron September 1535 cents 5 tonnes
18.5 micron September 1460 cents 5 tonnes
19.5 micron September 1420 cents 5 tonnes
Total 15 tonnes
Source – Southern Aurora Markets
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