IT WAS a hesitant week for the auction and forward wool markets this week.

The lack of direction was evident in the forwards all week. Buyers were reluctant to take on risk and the modest trades were restricted to the prompt month.

Interest post-Easter and into the new season waned as off shore buyers showed little confirmation of acceptance of these levels.

Supply concerns suggest that the market has limited downside, but history shows that the key driver is demand. The level of demand destruction due to increasing prices is difficult to ascertain. Even a correction of 10 percent would still see the market maintain the upward channel that Merino qualities have enjoyed for the last four years.

With similar quantities on the market next week the market direction will again be influenced by the expectation and assessment of new demand and the extent of financial pressure exerted on exporters to fund working inventory at these price levels.

Anticipated trading levels

Month                                                19 micron                           21 micron

March                                                2090 cents                         1870 cents

April                                                    2080 cents                          1850 cents

May                                                    2060 cents                         1810 cents

June                                                    2040 cents                          1780 cents

July                                                     2020 cents                         1760 cents

Trade summary

March                                 18 micron             2330 cents           4 tonnes

March                                 20 micron             1970 cents            5 tonnes

March                                 21 micron             1900 cents         10 tonnes

Total 19 tons