By Robert Herrmann | Source: AWEX
Riemann Wool Forwards contributed to the positive sentiment of the auction market this week, with trading on Wednesday a pre-curser to the following day rally in the wool auctions. Buyers rushed in to capture some of the grower GTC orders as the wool market began to focus on supply. Or more specifically, the concern about lower than expected supply going forward.
As previously noted in today’s Wool Market Comment, brokers have flagged that the normal Spring flush is not as prolific as was expected. And with low stocks in store, wool sales going forward are likely to be well below year ago offerings.
Trading focused on 2016 settlements, and exclusively in the 21 MPG tenor. All trades were above the 1300¢ level except for the August 2016 contract, which traded at 1295.
Growers are now able to secure prices for their next wool clip at percentiles above 85%. This is an indication of the concern the buying trade have for the next year. Or a more positive slant: it’s a vote of confidence for the wool market for 2016.
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