One category showing promise is the 21 micron sector where it is possible to secure forward prices close to 900cents a kilogram.

The current market is contrasted with a strong cyclic commodity price rally and by extremely uncertain global economic conditions, says E-Wool economist Matthew Tolmachoff.

"The large interest rate differential between the US and Australia remains and is set to widen as our Reserve adjusts interest rates up, all the while putting more upward pressure under the AUD/USD currency trend," Mr Tolmachoff said.

"This makes the Australian producer extremely vulnerable to any down swing in Chinese economy which may have been artificially overheated by Government spending and lending for growth in the face of the GFC.

"We would strongly recommend forward price coverage be put in place and risking the chance of continuing prices against next years clip."

Platinum agribusiness director Bill Mitchell wrote last week that in "our view if financial markets do take another major downturn the AUD will fall but wool prices will also fall due to lack of confidence".

However, Elders national wool selling centre manager was more cautious about forward contracts, signaling that the market was in the "early stages of its upward cycle" and improved prices were likely for early in the New Year.

"There has been limited forward contract activity to date," Mr Hogan said this week.

Most market commentary so far suggests that Australia’s shrinking wool supply will continue to offset low European demand.

Australian Wool testing Authority reported this week that November wool tested figures increased 11.5 per cent compared to the same period last season, while progressive totals for this season are at 165.1 million kilograms this season, down on last season’s 177.3 million kilogram rate.

Landmark Risk manager wool and livestock Anthony Boatman said low levels of wool supply and murmurs of increase in export orders for clothing from China would help push wool prices up.

"Reports from the recent 106th China Import and Export Fair say that orders were up by 6pc on the previous Fair in May pointing to an improvement in imports by the major markets (US, Japan and the EU) in the first half of 2010," Mr Boatman said.