Weekly Market Wrap

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With Adrian Field, Melbourne
Trading Manager

November 10, 2006

Over-correction before recovery

THE market corrected earlier this week before recovering some of the lost ground at final sales, with the Eastern Market Indicator (EMI) finishing 19 cents per kilogram down at 825c/kg.

Prices retreated 20-30c/kg at opening sales, but it turned out to be an over-correction, with the market improving by about 10c/kg later in the week.

As a result, the passed-in rate jumped from 10 per cent last week to 16.8pc this week.

All microns eased, but importantly climbed again toward the end of the week.

Southern region

All Merino fleece types recorded price falls of about 10-45c/kg, with 18.5-21.5 micron wools most affected. These types enjoyed the biggest price gains the previous week.

Merino skirtings followed the trend and lost some ground on day one before claiming it back at final sales. Finer crossbred fleece prices also reduced, while broader types recovered toward the end of the week. Carding wools were steady

National sales next week will put a large 84,500 bales under the hammer.

The start to sales this week was an over-correction. There is good business being done at current market levels, which suggests prices should continue to remain strong and possibly strengthen even further.

Higher prices are attracting greater wool volumes onto the market, which has caused next week's rostered offering to increase substantially. This will test the market, but there will likely be enough demand for prices to withstand the extra volume.

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