Grant Hutchins, Fox & Lillie Rural Forward Market Operations
Fox & Lillie Rural offers a comprehensive price-risk management service as part of our service offering to woolgrower clients.
Grant Hutchins, Fox & Lillie Rural’s Forward Market Operations specialist can support woolgrower clients to lock up a forward price on their wool clip up to two years ahead utilising our forward wool contracts service, providing excellent wool market advise and insight when it’s an appropriate time do utilise this service.
Every week Grant sends out a weekly Wool and Livestock Report to Fox & Lillie Rural clients. This is additional to the comprehensive and insightful weekly wool market reports that are sent out by Fox & Lillie Rural’s National Brokerage Manager, Eamon Timms.
Wool and Livestock Report, Friday 30th September
Cash market – Wool Auction Market
Sentiment and importantly lack of liquidity has taken the market significantly lower again this week. China buyers (except for one very large mill conglomerate) are experiencing commercial paralysis as a result of the markedly changed landscape for traders in their domestic market (all along the chain); COVID policy, property malaise. The 1.9% drop in the EMI masked losses in some segments of up to 5.7%. When considered in USD terms the EMI lost 4.8% due to the wilting AUD.
Cardings were the sole bright spot lifting slightly over the week. This is certainly a result of tighter supply with flows likely around 17% down on the same month last year. Up until this month production had been growing strongly. All markets seem to be re-adjusting to a higher interest rate structure and slow growth expectation for 2023. Timing wise, look for wool markets to struggle until after the China Communist Party’s general assembly week of 16/10/22.
Forward Contracts
Volume in the wool contracts sprang to life this week, as growers gave up on the idea prices would rally and took advantage of bargain hunters lurking under the cash market. In total, 65,000 kgs changed hands for November onwards, 17’s at 2250 (-70 cash), 18’s at 1750 (-56), 19’s at 1500-1550 (+12/-38), 21’s at 1230 (-51). Most of the volume was dealt prior to the open of selling on Wednesday. Bidding and offering has stepped down markedly again. 19’s are bid 1490 and offered 1520 out to end November. 21’s are bid 1220 and offered 1250 through to end 2022. There’s not much showing for 2023. A bigger sale of around 40k bales over three centres and two days will once again test the market.
Don’t hesitate to contact your local Fox & Lillie Rural Wool Marketing Representative for up-to-date pricing across all forms of forward wool contracting around your clip.
