IT was a volatile week for both the physical and the forward wool markets.
Opportunities appeared then vanished for buyer and seller as both sides questioned the momentum in the market. The early rally of the $A softened the tone from the outset, but good demand in the fine microns kept the interest and forward pricing up. This was highlighted by trades in the 18 micron contract at strong levels out to April 2018.
Demand on the broader qualities slowed and forward levels dropped significantly. The 21 micron contract traded to a high of 1450 cents in the early autumn and is now bid at around 1400 cents. Strong levels were achieved by growers with strategic GTC orders in the market through their brokers, with season highs in both 19 and 21 micron contracts.
The coming weeks will likely present challenges for buyers and sellers alike. Demand has been restricted by the rapid rise in prices, but supply is expected to disappoint. This will likely lead to a volatile market. The financial and currency markets are expecting the same volatility, with the hand-over of power this weekend in the United States.
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February 21 micron 1450 cents 7 tonnes
March 19 micron 1730 cents 10 tonnes
March 21 micron 1430/45/50 cents 22.5 tonnes
March 21 micron Put option 1440 strike 35 cents 10 tonnes
April 19 micron 1660/1670 cents 5 tonnes
April 20 micron 1527 cents 2.5 tonnes
April 21 micron 1437 cents 5.5 tonnes
May 18 micron 1775/1810 cents 9.5 tonnes
June 18 micron 1750 cents 7.5 tonnes
Oct 19 micron 1580/1600 cents 9 tonnes
April 2018 18 micron 1760 cents 5 tonnes
Sept 2018 19 micron 1520 cents 2.5 tonnes
Total 96 tonnes