ANTICIPATION of a strong spot auction on the back of a weak Australian dollar saw the forwards trade strongly to start the week.

Autumn and next spring traded well in modest volumes. Highs where set on 18 micron in May (2245 cents), 19 micron in March (2150 cents), 20 micron in March (1970 cents) and 21 micron in April at 1780 cents.

The spring levels, albeit at discounts to the front months, returned historical highs in such a volatile market – 18 micron (2120), 19 micron (1920) and 21 micron (1620). Volumes fell off as the week progressed with buyers unable to justify the gains through off shore orders and growers looking to maximise the surge in the spot price.

As highlighted last week, the current spot market, and to a lesser extent the forwards, are being affected by cash flow issues, supply and the erratic $A. The volatile nature of the stock market and concerns of rising interest rates has seen traders looking to defray risk.

The ebbs and flows of the global financial sector will continue to impact the wool market. We anticipate unstable conditions to continue with swings based on supply and cash constraints. With Chinese New Year next week we may see a short term demand reduction.

Anticipated trading levels

Micron                                19 micron                            21 micron

Feb                                       2130 cents                         1820 cents

March                                 2110 cents                          1800 cents

April                                     2100 cents                         1770 cents

May                                     2090 cents                          1750 cents

June                                     2030 cents                         1700 cents

Trade summary

March                                 19 micron             2150 cents                5 tonnes

March                                 19.5 micron         2050 cents                 5 tonnes

March                                 20 micron             1970 cents                 3.5 tonnes

April                                     19 micron             2115 cents                 5 tonnes

April                                     21 micron             1750/1780 cents   17 tonnes

May                                     18 micron            2245 cents                  2.5 tonnes

May                                     19 micron            2090/2105 cents    10.5 tonnes

May                                     21 micron            1750 cents                  2.5 tonnes

September                         17 micron             2500 cents                  2 tonnes

September                         21 micron            1620 cents                  7 tonnes

October                              18 micron             2100/2120 cents       7.5 tonnes

October                              19 micron             1920 cents                   3 tonnes

October                              21 micron            1610 cents                    2 tonnes

November                          19 micron           1900 cents                    2 tonnes

Total 77.5 tonnes