JUST when everyone thought there was a clear, predictable pattern emerging for the wool market - down one week, up the next - the market has mixed it up by going down one day, and then up again the next.
The first day of selling saw the market decline as expected by about 30c, but then the very next day it put all that back on, to finish the week virtually unchanged.
Thanks to a stronger Aussie dollar the market was 18c dearer in Trump money, and 9c dearer in Euro, but ended the week with an overall change in local currency of 1c.
Volatility in the wool market is now at the highest point over the past 25 years and causing consternation for everyone involved.
AWEX's Northern Market Indicator closed up 7c on 1252c. The 17 micron indicator closed on 1845c, 18 micron 1605c, 19 micron 1413c, 20 micron 1278c, 21 micron 1226c, and 28 micron 600c.
It is often said that traders need some volatility in order to trade as the market is so competitive and small that margins for greasy wool exporters really do not exist on a flat market.
So, in order to make a few cents most exporters must take a punt on the market moving, one way or the other.
But when volatility is such, the wins or losses rarely hit the bottom line and get lost in all the mad scramble to keep the ship on an even keel and moving forward.
People further along the chain despair at the price movements which, for those trying to watch carefully and decide when to buy their raw material just give procurement managers stomach ulcers.
So, the next five weeks of the wool market will probably continue to be just as volatile as the last three months, and as soon as growers push too much wool into the market it will go down.
- Bruce McLeish, Elders
Hence, more and more clients towards the pointy end of the chain have another reason to sit back and wait, as if COVID wasn't a big enough deterrent already.
Demand from retailers and wholesalers continues to be very lacklustre outside of China. This is a time when topmakers, spinners, knitters and weavers would normally be in constant discussion mode about the coming season and planning how to squeeze the new orders into the production schedule for the next six months.
China continues to roll along, almost as if covid is a distant memory, although they do still get the odd outbreak which is squashed with total lockdown of the affected area and widespread testing of millions if necessary.
There is no doubt China will become the largest market or economy in many measures this year as the US and Euro region remain constrained by the second or third wave of the virus.
China is currently the export destination for 83 per cent of Australia's greasy wool - up nearly 10pc on last year, but the domestic season in China is nearing an end.
Most of the greasy wool heading there now will still be looking for a home when it arrives.
Early stage processors and even latter stage processors are restocking, as they must, but new orders from their retail customers are starting to slow as the season winds down.
With 'Singles Day' having been run and won, the Chinese retail fraternity now look to Black Friday (November 27) as a last spurt of demand before things wind down again.
Hopefully the weather will turn cold, because current temperatures across China are not exactly conducive to selling winter clothing.
There are still the usual Chinese government uniform orders working their way through the system and these are consuming a lot of wool, simply given the sheer scale involved.
However, the bulk of these orders are now "in work" meaning the greasy wool has already been purchased and mostly processed into yarn or fabric.
So, what will drive the wool market for the next five weeks until the Christmas/New Year recess and we can finally bid farewell to 2020.
Despite the lack of activity from the European market, no doubt there is plenty of design work still going on from home offices across Europe.
Given the fact that the Italians cannot frequent the cafés and coffee bars, or restaurants late into the evening, they will no doubt be working at home and still creating next year's collections.
Providing that one or more of the vaccines currently in the pipeline gets approved, and works, people can emerge from their burrows, get a jab, and hit the ground running in the New Year.
The banking guru's in Australia are starting to get excited about the potential strength of the recovery here given that they can see the size of the cash reserves people have accumulated over the past six months.
Given that they are going to pay you zero or less to leave it with them, they expect the population will go forth and spend as soon as confidence allows.
Assuming that this is a world-wide trend we may just see a flurry of retail recovery once the vaccine is out.
There will no doubt be the naysayers who think the vaccines won't work, will cost too much, cannot be distributed fast enough or that the sky is falling in. But so many people around the globe will just be so happy to have the chance to get out and about again - just ask a Melburnian.
So, the next five weeks of the wool market will probably continue to be just as volatile as the last three months, and as soon as growers push too much wool into the market it will go down.
As they withdraw or pass it in, the market will squeeze up again and prices will rise.
In the lead up to the recess there will be the usual stock building activity from the trade to cover the recess, and then everyone will be closely watching the guys in the white coats to watch progress of the vaccine trials.
No doubt the handover in the White House will provide some interesting times as well, and the other guys in white coats may yet get a call from there too.
But all-in-all 2021 can't come fast enough for most in the trade.
The demand side of the equation has battled manfully to keep things moving over the past couple of months.
Wool is now back to a reasonable price, not too expensive for processors or consumers, yet growers can make a living at this level as well.
The supply side will hold the reigns to a large degree for the next month or two.
If the weekly offering pushes above 40,000 bales, we can expect to see pressure build and prices come under pressure.
The grower stockpile is currently not building, with recent reports suggesting a total figure in store of 230,000 bales, which is similar to a few months ago.
No doubt shearing is behind schedule with wet weather and the shortage of shearers, but keeping that weekly offering in tune with demand is the biggest challenge the industry faces in the short term.