Futures market ready to lift?

Press, 21 April 1984, Page 21

Futures market ready to lift?

All the indications for wool futures are for a rising market, according to Mr Geoff McDonnell, futures manager of Mair and Company, Ltd, of Christchurch. The market had been bouncing off a bottom, with more leaning to rising than dropping, he said on Thursday. There were pointers to a short-term rise, which might mean the market was re-aligning itself. A Chinese delegation in New Zealand could be buying wool, which would cause optimism in trading houses. Another effect on the physical wool market might be an end-of-season scramble by trading houses to buy wool to tide them over the winter, Mr McDonnell said. This might well boost prices for the start of the following season. The market had been volatile this week, with prices down 4c to 5c on Wednesday because of a weak Southland wool sale. But the Southland prices had been affected by the effects of flooding on the wool. On Thursday, prices returned to their Monday level with some fairly strong buying by one or two trading houses, Mr McDonnell said. The futures market this week continued to weaken as expectations of better demand for wool failed to materialise, said a spokesman for John Marshall and Company, Ltd, of Christchurch. The market was

easier by around 4 cents in most months on last week’s closing prices. “Futures prices now appear to be falling back into line with market fundamentals with a certain amount of trade selling triggering limited stop-losses for traders holding long positions. At these levels we expect to see fluctuations within a 3 to 5 cent range in a slow, easier market,” the spokesman said. “The Easter break has traditionally provided a small boost to prices of physical wool. This, combined with the fact that the next sale is not until May 6, could provide good buying opportunities over the next couple of weeks.

“Technically, a break below the 438 level for August 84 futures or 442 level for January futures could signify further falls. However, futures prices sustaining the 442 level after the fall to 440 would signify the end of the bear trend.” New markets The directors of the promoting company, N.Z. Commodities Market, Ltd, say there is widespread interest in the proposed new futures markets after the release of the offer document in late March. A meeting of interested Parties is scheduled for Wellington on May 2. The Application date for part one of the tenders has been extended to May 18.