Weekly Market Wrap

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With Mark Dyson, Managing Director

October 17, 2008

Market gains lost - where to now?

THERE were no positives this week for the wool market, which opened in Newcastle on Tuesday.

In Newcastle, many of the better spinners and top maker types were down 100 to 200 cents per kilogram on the first trading day, which set the trend for the week.

On Wednesday, with the three regions selling, both the southern and western markets followed the Newcastle trend. Newcastle was predominately 19 micron and finer and of better specifications. In the south and west, all microns fell 20-25c/kg except the crossbreds, which fell 5-10c/kg on Wednesday.

In Melbourne on Thursday, the 22-26 microns remained firm and the 20 micron and finer fell 15-20c/kg. There were noticeable decreases as sales progressed, which was probably due to orders being filled. The 30-micron and broader wools received very good support and enjoyed 5-15c/kg increases. Oddments were in reasonable demand and generally remained firm on both days.

In the south at the close of the market, the 17 micron indicator fell 84c/kg and closed at 1489c/kg, the 18 micron indicator closed at 1367c/kg (down 41c/kg), the 19 micron indicator fell 43c/kg, which was equivalent to last week's rise for these types and closed at 1070c/kg. The Merino fleece 20 micron indicator closed at 832c/kg, a fall of 42c/kg, the 21 indicator fell 35c/kg to close at 781c/kg, the 22 indictor fell 20c/kg and closed at 759c/kg, the 23 micron indicator fell 20c/kg to close at 748c/kg and the only Merino indicator to rise was the 24 micron type, which rose 3c/kg to close at 748c/kg.

Once again, the longer better specification skirting received strong support, with particular interest in the lower VM types, which closed reasonably firm.

Crossbreds generally fell on the first day and on Thursday the broader types were actually dearer. Oddments rose 3-6c/kg on the first day and remained unchanged on Thursday.

This week there was 55,911 bales offered, with 20.5 per cent passed-in nationally.

The Eastern Market Indicator closed at 839c/kg, which was a fall of 29c/kg.

Next week there will be the largest offering of the season, with just over 71,000 bales rostered nationally, which is close to 9000 bales more than was forecast a week ago.

New Zealand Merino has just over 3000 bales in Melbourne next week and is rostered to offer nearly 3000 bales the following week.

The national forecast for the following few weeks has also increased considerably.

There are suggestions about spinners beginning to renege on contracts, which, in turn, generally has a flow-on effect throughout the supply chain.

On top of the current economic uncertainties and low level of demand for wool, the larger offerings will place enormous pressure on the market.

Many of the clips being offered would normally hold till early in the new year or be sold at staggered intervals over the next six to 12 months. Due to so much uncertainty, many growers have opted to offer now to combat any further potential losses - and the dry times are not assisting these decisions.

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Mark Dyson, Managing Director
 
 


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