Weekly Market Wrap

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With Brian Vagg, Melbourne

November 16, 2007

Market cracks 1000c/kg

ON Tuesday, the eastern market indicator closed at a season high of 1000 cents per kilogram (up 4 per cent), with the Australian dollar trading at a low of around 88.04 US cents. This was 5.71c below the levels of last Thursday.

The dollar traded higher on Wednesday and there was sentiment that the market moved too quickly yesterday. This resulted in most Merino fleece types losing 10-15c/kg. Crossbred fleece recorded some long overdue increases.

The dollar was a little higher again on Thursday, which resulted in 22-micron and finer wools easing 10-15c/kg. The 20.5-micron range recorded the biggest price falls.

In US terms, wool prices are at levels that we have not often experienced in the past decade. Key players are indicating demand for wool is still strong. A 23-micron bale of wool yielding 60pc dry is averaging around $1100. A reasonable 21-micron bale with the same yield would return close to $1300.

The national offering was 58,237 bales. Once again, purchasing came from all sectors, including a strong commitment by some of the topmakers.

The national passed-in rate was 6.2pc, with only 3618 bales remaining unsold.

All centres will be selling next week, with just over 54,600 bales rostered nationally.

Australian Wool Innovation (AWI) held its annual meeting in Geelong on Wednesday. Kevin Bell, Roger Fletcher and Chick Olsson were all elected to the AWI board. Peter Sykes, Hugh Nivison and Robert Pietsch all missed out on positions.

Southern region

With the dollar trading 5.71c below last Thursday's level, there was a mood of anticipation when wool sales resumed on Tuesday.

As expected, due to the currency, the market opened with prices increasing significantly.

All Merino fleece recorded gains of 35-60c/kg clean. The broader microns, especially 21-micron wools, fetched close to an extra 65c/kg. A limited selection of good finer lots resulted in this end of the market being a little subdued compared to the broader types, however increases of around 30c/kg were achieved.

On Wednesday, 19-micron and finer wools drifted by about 12c/kg, as did 21-micron fleece. On Thursday, 23-micron and broader fleece remained firm. The 22-micron and finer end eased 12-16c/kg.

By the close of the week, 18-micron and finer wools finished firm, 18.5-micron wool closed 20c/kg firmer, 19-micron wool finished a good 30c/kg higher and 21-micron types gained close to 40c/kg clean. All other Merino types recorded rises of 20-30c/kg.

Merino skirtings jumped 10-15c/kg clean for the week, especially for the longer and low vegetable matter types.

The finer (28-micron) crossbred fleece increased by 25c/kg and the 30-micron category gained 15c/kg. Broader crossbred wools achieved a small rise.

All crutchings and locks were generally 6-12c/kg firmer.


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