FORWARD wool trading was again sparse this week, as the spot auction market closed for the Easter break still uncertain of direction.

Having looked to find a base Tuesday, with most qualities lifting, the majority eased into Wednesday on the vagaries of selection and a stronger Australian dollar.

There was very little interest from forward sellers in the medium term leading into the season close. Growers and exporters are uncertain of the impact of diminishing supply and equally muted demand. Buyers were looking to cover and the 21 micron contract traded at cash early in the week (2250 cents for June).

Most interest from the forward selling side was focused on longer term hedging. With crossbred prices at record levels, growers were able to get cover at the 90th percentile and above for 28 micron out 12 months. December traded at 1010 cents and March 2020 at 995 cents.

On the Merino qualities, exporters and processors continue to bid the near term steadily even with the current down trend holding. Selection risk is still evident, maintaining interest levels near cash out to June. Spring and summer levels are discounted 100 to 150 cents, equating where new long term export business can be written. The 19 micron contract traded to June 2020 at 2150 cents. From an historical point of view, this is in the top 10 percent of prices for the last decade. Taking a more recent view, it is in the top 25pc of prices for the last four years of price data.

We expect interest to remain steady on the forwards next week in the absence of spot auctions. Volume will be determined by the offshore demand over the recess.

Trade summary

19 micron June   2020                                    2150 cents                         5 tonnes

21 micron June 2019                                      2250 cents                         5 tonnes

28 micron December 2019                           1010 cents                       10 tonnes

28 micron March 2020                                     995 cents                       16 tonnes

Total 36 tonnes

Projected forward trading levels for next week

Month                                 19 micron            21 micron            28 micron

May                                     2265 cents          2150 cents          1100 cents

June                                     2265 cents          2140 cents          1100 cents

July/Aug/Sept                    2170 cents          2050 cents          1100 cents

Oct/Nov/Dec                     2160 cents          2020 cents          1040 cents

Jan/March 2020                2150 cents          2000 cents           990 cents

Apr/June 2020                   2140 cents          2000 cents            930 cents

Jul/Dec 2020                      2140 cents          1970 cents            900 cents

Source: Southern Aurora Markets.