Weekly Market Wrap

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With Mark Dyson, Managing Director

January 30, 2009

Stability continues, but caution remains

THE wool market maintained some stability this week, assisted by a smaller offering of just over 44,000 bales.

The national catalogue was more than 17,000 bales down on last week's offering and this probably eased the pressure on prices a little, however on Thursday the Australian Dollar finished slightly higher than the same time last week at 66 US cents.

By the end of the week the dollar traded back to 64.4 US cents, which should provide for a largely unchanged market next week.

The Eastern Market Indicator (EMI) closed the week at 741 cents per kilogram clean, just 3c/kg down compared with last week.

The short supply of broader wools ensured good demand for these types, with most recording small price increases up to 15c/kg.

Unfortunately, it was a different story for finer wools and the discounts for these types were more pronounced in the southern region, where there was a much larger quantity of these wools. A significant portion was also tender with high midbreaks.

Wools in the 16.5-19 micron bracket were most affected, attracting discounts from 15-47c/kg.

The outlook for finer wools remains subdued as a result of the oversupply, with similar high volumes of these types in the northern hemisphere as well.

Crossbred wools continued their gentle price recovery from previous weeks. There has also been strengthening activity on cardings from China, which hopefully can provide some base confidence for the market.

Overall, demand continues to be sluggish and paints a cautious picture for the market in coming weeks. At this stage, little change is anticipated.

Chinese buyers dominated the competition just days after the Chinese New Year, however their purchasing remains on a "hand-to-mouth" trend.

India provided some good support, but Europe continued to be very quiet.

A total of 3015 bales were withdrawn prior to sales this week, with reoffered wool accounting for a high 17.6 per cent of the national catalogue. The pass-in rate finished at 11.8pc.

Next week's national roster is tipped to nudge the 50,000-bale mark, with similar offerings in following weeks. This volume represents an 11.3pc drop compared with the same period last year.

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June 27, 2008
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May 09, 2008
May 02, 2008
April 24, 2008
April 18, 2008
April 11, 2008
April 4, 2008
March 21, 2008
March 14, 2008
March 7, 2008

Chris Vordermaier, Wool Brokering Manager

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