Markets

Forward trades sluggish, but fine wool in demand

Michael Avery, Southern Aurora Wool, February 3, 2017

Southern Aurora Wool logo dec-2016FORWARD contracts traded in light volume as buyers and sellers looked for guidance from the auction and offshore, following the Chinese New Year.

Fine wools continued to be in demand with modest quantities trading out to June and prices rising in forward contracts 30 cents above last week’s levels.

Demand into the spring remains sluggish, with buyers reluctant to commit at historically high levels. Risk and volatility remain high. The strong $A, buoyed by record trade figures, looms as a concern to exporters who are looking for confirmation of off shore demand. Medium wool demand is still patchy and reflected in the lack of support in the forward months.

We expect the same pattern to extend into next week. Buyers will remain cautiously optimistic on the finer wools, with sellers lifting their target prices. Enquiry for options continues as growers look to protect against a trend reversal. Option sellers are looking for higher premiums to compensate against the higher volatility of the market seen over the last month.

Trade summary

April   19 micron   1676 cents   2.5 tonnes

May    19 micron   1660 cents   7 tonnes

May    21 micron   1390 cents   2 tonnes

June    19 micron   1680 cents  10 tonnes

Total   21.5 tonnes

Source: Southern Aurora Wool.

HAVE YOUR SAY

Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

Get Sheep Central's news headlines emailed to you -
FREE!