FORWARD 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.
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.