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Friday, October 05, 2018

Weekly wool forwards- week ending 5th November 2018

By Nathan Denny  |  Source: Riemann, Mecardo

Key points

2018-10-05 Wwf Fig 1

Activity on the wool forwards market remains muted with the current seasons supply challenges and the falling physical market. Overseas buyers are still graced by the Aussie dollar sitting at 70.8 US¢, the lowest level since 2016.

Relatively rare in the wool market is a forward curve in a state of contango, or when forward prices are sitting higher than spot prices. The curve is showing prices holding steady until the beginning of the new year, signalling that exporters are nervous about supply and willing to pay out at these prices levels for the coming months. Supply in Merino wool between the 20-25 microns have seen volumes of up to 60% less than this time last year. This has been the contributing factor driving up prices in current markets. Finer microns have seen a downward pressure put on their wool premiums due to an oversupply.

Last week 19 micron fibers saw two contracts being traded at 2,320¢ for October 2018. 21 micron wool saw two contracts traded at 2,150¢ and 2,165¢ for November 2018.

This week contract for 19 micron wool traded at 2,350¢ for November 2018, while 21 micron dealt at 2,200¢ for November.

No minimum price contracts traded this week. 

Nathan Denny is a second year Marcus Oldham Agribusiness student currently undertaking his internship with Mecardo. He comes from  the Southern Riverina, where his family produces cereals, rice and corn. 

Mecardo information is provided to assist in your marketing decisions. It contains a range of data and views on the current market. It is not intended to constitute advice for a specific purpose. Before taking any action in relation to information contained within this report, you should seek advice from a qualified professional. The information is obtained from a variety of sources and neither Mecardo nor Ag Concepts Advisory will be held liable for any loss or damage whatsoever that may arise from the use of information or for any error or mis-statement contained in this report. 

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