Weekly Market Wrap

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With Mark Dyson, Managing Director

August 22, 2008

Wool market retreats

QUALITY Wool commenced the selling on Wednesday this week with its Merino fleece selection.

Fortunately, we escaped most of the downward market trend from the sales the previous day in the northern region. However, prices started to ease an hour after selling commenced.

For the first hour the fleece types remained fairly firm. Then a 15 cent per kilogram decline occurred in most of the 19.8-22.6 Merino fleece types.

On Thursday, most of these types fell a further 5-10c/kg, especially on the poorer selection.

Skirting types were slightly easer on both days in Melbourne and cardings were in sellers favour.

The 26-28 micron crossbred types eased 5-10c/kg on Wednesday and a further 5c/kg on Thursday.

The trade was hoping the retreat in the Australian dollar may have assisted with some actual demand, but the expectations did not to come to fruition.

The national offering was just over 41,657 bales, of which 12.6 per cent was passed in.

The Melbourne market closed the week with the 17 micron fleece types rising 10c/kg to close at nearly 1500c/kg clean, the 18 micron types eased 5c/kg to close at 1359c/kg, the 19 micron indicator closed at 1081c/kg (down 12c/kg), 19.5 micron was down 30c/kg to close at 984c/kg, the 20 micron indicator fell 24c/kg to close at 894c/kg, 21 micron fell 24c/kg to close at 839c/kg, and 22 micron fell 25c/kg to close at 818c/kg. The 23 micron and broader wools were reasonably firm for the better types, however the 23 micron indicator was quoted down 18c/kg to close at 807c/kg and the 24 micron indicator had a 3c/kg rise to close at 789c/kg.

The crossbred indicators were also quoted 13-15c/kg down for the 28 and 30 micron wools respectively. The 30 micron was down 1c/kg to close at 373c/kg, while the carding indicator was quoted up 4c/kg and closed at 404c/kg.

In summary, it was a week we would rather not have had. A few months ago the executives of Graincorp decided they would close there wool exporting division. Nobody likes to see a decreased number of buyers bidding in the room, but our concern was regarding their strength in the derivatives. Without them, as well as a downsized BWK, a real void was apparent.

Early in the week there was some good news with the majority of the Graincorp wool team announcing they will be back as a new force and division within Queensland Cotton.

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Mark Dyson, Managing Director

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